Major U.S. retailers likely ended March with lackluster sales as consumers put off Easter and Spring purchases for April.

Overall, March same-store sales are expected to fall 0.3 percent, and a steeper 4.7 percent, excluding Wal-Mart, according to Thomson Reuters data.

Excluding Wal-Mart, sales fell by the same amount in February.

We don't see any signs of significant improvement with the exception of a continued full-fledged flight to value retailers, said Craig Johnson, president of Customer Growth Partners, a retail research firm.

Wal-Mart Stores Inc , the world's largest retailer, is expected to post a 3 percent gain in same-store sales, according to Thomson Reuters data.

While tight inventory control and lower discounts could help cushion the decline every retail segment, with the exception of discounters, is expected to post a same-store sales decrease in March.

Same-store sales, which track sales at stores open at least one year, are seen as a key gauge of retail performance.

U.S. retailers are expected to report March same-store sales later this week, with Wal-Mart set to post results on Thursday.

CHANGING WEATHER, LATER EASTER

Weather fluctuated across the United States during the month, hampering demand in some areas and spurring sales in others. For example, shoppers bought Spring items in the South, while those in the rain-hit Upper Midwest bought only essential supplies, Planalytics said.

Easter coming late this year may also hurt sales, particularly for apparel and department store chains, which tend to benefit from holiday-related sales.

Easter has become more of a merchandising event because over time, more things like DVDs, electronics and apparel have been the impetus behind the spending, said Sarah Henry, a retail analyst with MFC Global Investment Management.

For March, department stores are expected to post a 9.9 percent decline in same-store sales and apparel stores are expected to report a 8.4 percent drop. Upscale stores such as Saks and Nordstrom likely suffered the most, with declines of 25 percent and 16 percent expected respectively, according to Thomson Reuters data.

Consumers are under significant pressure and we don't anticipate that changing any time soon, said Brady Lemos, a Morningstar analyst. We, like most analysts, have a pretty pessimistic view for the foreseeable future, unfortunately.

GLIMMER OF HOPE?

Investors are, however, have been buying.

The S&P Retail Index <.RLX> is up about 31 percent since March 5, while the Dow Jones Retail Index <.DJUSRT> is up roughly 20 percent.

By comparison, the S&P 500 <.SPX> is up 22 percent and the Dow Jones Industrial Average <.DJI> is up 21 percent.

One reason for the uptick could be that the expected sales decline in March is not much worse than March 2008's 0.5 percent drop, as calculated by the International Council of Shopping Centers. This March, ICSC expects same-store sales to be flat to down 1 percent.

Also, the retail sector is expected to be among the first to benefit when the economy improves, which Customer Growth Partners' Johnson expected at the end of this year or in 2010.

We are very cautiously optimistic but the emphasis is more on caution than optimism, he said. The optimistic signs are strictly by the fact that when you are this far down, anything looks like up.

(Reporting by Aarthi Sivaraman, editing by Leslie Gevirtz)

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