Shoppers searched for bargains and basics in May, leading many retailers to miss sales expectations on Thursday even though the bar was set pretty low for most chains.

While there have been early signs of stabilization such as improving consumer confidence, issues such as unemployment and the troubled housing market have led many Americans to take on a thriftier attitude.

Upscale department stores posted some of the steepest drops in sales at stores open at least a year, or same-store sales.

The high end continues to struggle, those in the discretionary spend segment are really continuing to get clocked, said Ken Perkins, president of Retail Metrics.

At Costco Wholesale Corp same-store sales fell 7 percent, worse than analysts' expected, hurt by the stronger U.S. dollar and lower gasoline prices, which deflated its fuel sales.

Costco is now the largest member of the revenue-weighted Thomson Reuters same-store sales index since Wal-Mart Stores Inc decided to no longer report monthly sales. Wal-Mart, the world's largest retailer, had accounted for about half of the Thomson Reuters index.

Target Corp and BJ's Wholesale also reported steeper-than-expected drops in May same-store sales, sending their shares down in premarket trading.

So far, 13 of 22 retailers have reported worse-than-expected same-store sales, according to Thomson Reuters data.

Overall, May same-store sales were expected to fall 4.1 percent from a year earlier at companies tracked by Thomson Reuters, compared with a 1.1 percent rise in May 2008. Such a decline would be smaller than the year-to-date average of a 4.5 percent drop.

In May 2008, before the financial crisis was declared a recession, retailers felt the benefit of consumers starting to spend their stimulus rebate checks. They face a tougher comparison to that spending in June, when more shoppers spent the checks, analysts said.

FOOD SELLS AT WHOLESALE CLUBS

Excluding sales of gasoline, same-store sales rose 1 percent at Costco and 4 percent at BJ's. Food was one of the best sellers at both chains. Costco said shoppers scooped up deli meats, frozen food and candy.

Department stores posted declines, though the 9.1 percent drop at Macy's Inc was slightly better analysts had expected. Nordstrom Inc's same-store sales fell a steeper than expected 13.1 percent and Neiman Marcus' comparable revenue plunged 23.3 percent, showing that luxury retailers continue to suffer.

The steepest sales decline came from Abercrombie & Fitch , whose same-store sales slid 28 percent, worse than the 24.1 percent decline analysts had expected.

Gap Inc reported a larger-than-expected 6 percent decline, as decreases Gap and Banana Republic stores offset a gain at Old Navy driven by a one-day $1 sale on flip-flops.

In the teen category, Hot Topic Inc 'a same-store sales fell 6.4 percent, steeper than analysts' forecast for a 4.3 percent decline.

One bright spot was Buckle Inc , which surpassed forecasts with a 13.4 percent jump in May same-store sales. Perkins said it was the 22nd month in a row that Buckle's same-store sales rose double digits.

Results from smaller retailers such as Buckle may receive more attention now that Wal-Mart has stopped reporting monthly sales, analysts said.

Without Wal-Mart's impact, investors will get a clearer picture of how other discount chains, department stores, apparel retailers and drugstores are faring in the recession.

Buckle, which caters to teens with more basic merchandise, said it even sold some more expensive items than a year earlier, with prices up about 3 percent in the women's category, which accounts for the majority of its business, and up about 8 percent on the men's side.

While Wal-Mart did not issue monthly sales data, investors will watch for any general comments it makes about sales as it talks to members of the media on Thursday and addresses shareholders and analysts at meetings on Friday. Earlier on Thursday it said it would add more than 22,000 jobs this year at its stores in the United States.

(Additional reporting by Martinne Geller in New York, Ben Klayman, Ian Sherr and Brad Dorfman in Chicago, editing by Dave Zimmerman)

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