Retailers’ Christmas Prospects Brightening
Undated (AP) _ With 10 days left until Christmas, the holiday spirit has lured shoppers back into stores across the country and brought some cheer to retailers haunted by the prospect of a gloomy season.
Retail sales have ″shown some modest improvement,″ said Jeffrey Edelman, an analyst with Drexel Burnham Lambert Inc. ″The consumer is responding and stores are moving inventory.″
Sales at most stores this month have run close to or above retailers’ expectations, and the rate of growth was better than in November, when many stores reported disappointing results, said Monroe Greenstein, an analyst with Bear Stearns & Co.
Said Walter Loeb, an analyst with Morgan Stanley & Co.: ″I believe this is going to be a good Christmas for retailers. ... The momentum we see now is going to carry forward.″
But some of the analysts remained cautious.
″Great it’s not,″ said Edelman.
Rick Nelson, of Duff & Phelps Inc. in Chicago, warned, ″It’s going to be a nail-biter.″
Dismal November sales, which followed months of sluggish consumer spending and the stock market crash in October, heightened fears of a lackluster or even disastrous Christmas.
Those fears led many retailers to mark down or heavily promote their holiday merchandise, and many continue to do so, Nelson said.
While the analysts sounded more positive, stores continued to give mixed reports about the season so far.
Perhaps the most vulnerable are retailers who own one or a few stores. Several who were contacted by The Associated Press said markdowns at larger operations were drawing their customers away.
″Every major department store is giving stuff away,″ said Marianne McDonough, president of Gifts Etc., a chain of 14 gift stores in the Chicago area, where sales are down slightly from last year.
″We can never compete in the same way,″ she said.
The competition from shopping malls has drawn customers from Vincent’s Photo shop in Palisades Park, N.J., near New York City, but owner Vinnie Gogluicci said business should pick up in the last week before Christmas.
″I’ve been in business 14 years and it always seems the same thing,″ he said. ″I think people do the mall thing first and then go back to town,″ where smaller stores such as his are located.
Some smaller retailers draw shoppers simply because they aren’t large stores and are located far from crowded malls.
″We find that a lot of people who come to see us ... can’t deal with the whole mall,″ said Steve Blanchette, manager of Blanchette Sporting Goods in Shelton, Conn.
But Pat Bowlby, owner of McDonalds Jewelers in downtown Novato, Calif., said the flip side of that benefit is harder work: ″We have to motivate ourselves″ because traffic is drawn to mall stores simply because they are at a mall.
Blanchette said his store’s sales were running about even with last year’s results, and he was pleased. Bowlby said sales are down slightly, but he expected a last-minute rush to shop.
The weather, which affects retailers large and small, has had an effect on sales in some areas.
It’s hard for shoppers to get into in the Christmas spirit when it’s warm, and a mild December in Chicago has contributed to Gift Etc.’s lower sales, Ms. McDonough said.
″We need 2 or 3 inches of snow and a nice cold snap here,″ she said.
But at the Emporium in Ontario, Ore., one of a chain of 22 stores selling clothing and home items, manager Frank Kaufman welcomed better weather, which he said has helped boost sales 30 percent above last year.
The stock market crash and the economy, cited as a contributing factor in last month’s slower sales, were still on the minds of some retailers.
Sales at the Clothes Loft in Grand Haven, Mich. slowed after the crash, ″but we’ve come along since then,″ said manager Kim Vukovich.
However, Blanchette saw no evidence of concern at his sporting goods store: ″This time of year, people don’t think of prices. You got it, they buy it.″