The retail sales segment of the economy continued its dismal performance in January. Overall, same-store sale gains in January were the weakest for a January period since Thomson Reuters began publishing data in 2000.

In a classic through-the-looking-glass reaction, the market has chosen to view the report as positive, as sales did not decline as much as securities firms' analysts had expected. As a result, stock prices for many of the retailers have actually increased.

Kohl's Corp. (NYSE: KSS) recently said that it would scale back its plans for opening new locations in the U.S. in 2008 and for the next few years, citing a "squeeze-play on consumers." Instead of the announced 90 new stores this year, Kohl's now expects to open 70 to 75 new stores this year. The retailer is still on track to open its 1,000th store later in 2008, however.

Although the "mall store outside the mall" has identified about 400 sites for potential locations in the near future, it said that kind of expansion may not happen until 2014. Last year, the retailer opened 112 stores nationwide, ending up with a total of 943 stores total in 57 states.

Kohl's is right when it said that its customers are "under a lot of pressure" due to higher fuel, grocery and health care costs. The good news, from what I have seen in the past, is that Kohl's has very low prices for much of its "Croft & Barrow" apparel items, its private-label brand. If it can fight the good fight with Target Corp. (NYSE: TGT) and Wal-Mart Stores, Inc. (NYSE: WMT) in terms of prices and clothing selection, it may yet have decent sales on those items as expensive housewares and related items sink this year.