Holiday shopping uptick lifts retailers
Cash registers are ringing more frequently in the nation's stores amid signs that the pace of Christmas shopping has picked up in the last week, store executives and industry analysts say.
But the recent speedup in buying follows several weeks when parking spaces were easy to find in many shopping malls and store managers worried about being stuck with large amounts of unsold goods.
As a result, bargain hunters will find a much larger than normal selection of merchandise being offered at discounted prices, industry experts say.
While the list of the most popular items varies from store to store and region by region, traditional gifts such as clothing and board games are doing well. One high-tech adult toy, the videotape recorder, is ''being blown out the door,'' one industry analyst says.
''Beginning with Saturday, Dec. 8, sales strengthened through all of our divisions,'' says Philip Bradtmiller, director of investor relations at Associated Dry Goods Corporation. Before that, the sales trend was ''very spotty ,'' he says. The firm owns a variety of chain stores, including Lord & Taylor, L. S. Ayres, Caldor's, and J. W. Robinson.
''Beginning in the third week of the season, sales picked up'' in most stores , adds Monroe Greenstein, retail analyst at Bear, Stearns & Co. The Christmas selling season officially begins Thanksgiving weekend.
More vigorous buying activity is good news for the US economy, which had slowed in recent months and needed a spurt of retail sales to avoid slipping into a recession, many economists said. Roughly 20 percent of all retail sales occur over the Christmas holiday, and as much as 50 percent of retailers' profits are earned then.
''A good Christmas is always important'' for the economy, says Edward Friedman, senior economist at Chase Econometrics. ''This year it is particularly important since the economy has been flat for five or six months.''
Despite the recent surge in holiday buying, the Christmas sales gain at the nation's stores will still be smaller this year than last. Sales surged 12 percent over prior-year levels during Christmas 1983, analysts say. This year, stores will post gains of 7 to 8 percent, says Bruce R. Grier, vice-president at Drexel Burnham Lambert.
''I think the Christmas season will be very decent,'' says Robert Gough, senior vice-president at Data Resources Inc.
The recent sales surge follows buying that was generally disappointing once the Thanksgiving weekend shopping spree was over, some retailers say.
''Sales for us, as for all others, have been soft since Thanksgiving,'' says an official at J. C. Penney, which operates 1,600 stores across the United States.
''In the first two shopping weeks of Christmas - the last week of November and the first week of December - sales showed modest gains'' from 1983 levels, Mr. Greenstein says.
The Commerce Department reported Thursday that retail sales jumped 1.8 percent in November, to a record $110.3 billion. That would put November sales 8 .3 percent above year-ago levels. (The figures are adjusted for seasonal and selling-day differences but not for inflation. Revised figures show that sales rose 0.1 percent in October, originally reported as a 0.1 percent decline.)
Industry analysts noted that the November figures are estimates based on a relatively small sampling of stores and are thus are subject to wide revision.
The numbers ''will be subject to a very, very substantial downward revision, '' Mr. Grier says. The figures ''bear no relation to what I have observed is going on.''
While the uptick is welcome, ''I don't think anybody could come though and say this could set the stage for strong growth in 1985,'' says Donald Ratajczak, director of the Economic Forecasting Project at Georgia State University. ''All it does is keep us from going down.''
Analysts offer several reasons that sales are expected to rise less in 1984 than the year before. For one thing, gains in employment and income are slowing as the economy moves from fast-paced recovery to a slower, more sustainable pace. That tends to make consumers more cautious. In addition, the ratio of consumer installment debt to disposable income has risen to 17.1 percent, approaching its 1979 peak of 17.9 percent, Mr. Gough adds. Higher debt loads also make consumers somewhat less eager to buy.
While consumers are a bit more cautious, stores budgeted for sales gains of about 10 to 12 percent, Mr. Grier says, only slightly below 1983 levels.
When consumer buying was weak in October and some of November, retailers ''clearly panicked,'' he says.
''They have reduced prices anywhere from 30 to 50 percent,'' on some merchandise, he adds.
Widespread discounting could hurt retailers' profits, analysts say. But Mr. Bradtmiller notes that some discounted merchandise was bought for that purpose and will bring the normal profit margin.