Share this story
Close X
Switch to Desktop Site

Retailers Start Shopping Season Early, but Consumers Are Cautious

Analysts project modest sales gains, pressure on profit margins

About these ads

MANY retailers, worried about sluggish sales, are bringing Christmas tinsel to their stores even before putting away the Halloween jack-o'-lanterns.

``The balls of pine and glitter are being strung around many stores now,'' says Janet Mangano, a retail analyst with Burnham Securities Inc. ``But the only time I can remember Christmas displays going up so early was a few years ago on Oct. 10. But that was in the middle of a recession.''

``This is a very challenging economic environment for retailers,'' Ms. Mangano says. ``American consumers are shopping closer to their actual needs than ever.'' That means, she says, that they are ``waiting to the last minute'' to make purchases and then basing decisions on value. Many retailers could see ``flat to only modest sales gains for 1993,'' Mangano says.

The retail industry has become increasingly important to the United States economy in terms of jobs. Wal-Mart is the second largest employer in the US, behind General Motors Coporation. Last year, between September and December, consumers were spurred on by the euphoria stemming from the election of a new president. Retail sales rose 5.4 percent for the year to $1.9 trillion, up from a negligible rise of 0.9 percent in 1991.

But the 1992 buying spree was also aided by a change in tax policy by the Bush administration which lowered payroll withholding levels. ``Consumers spent about $20 billion in the final months of 1992 that would have been spent on retail sales in the first half of this year,'' says Thomas Tashjian, a retail expert with First Manhattan Company, a financial services firm.

CONSUMER confidence, while rising, is still below last year's levels. ``Total retail gains this year will probably not be much above 2 percent to 3 percent,'' Mangano says.

``The problem is mainly related to one issue - jobs,'' says Kurt Barnard, who publishes Kurt Barnard's Retail Marketing Report. ``Americans are concerned about job availability and job security. The unemployment rate is coming down, but very slowly.''


Page:   1   |   2

Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.