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Some Retailers Say Sales Dipped After War Began; Flags, Radios Selling Well

January 24, 1991

NEW YORK (AP) _ As the war in the Persian Gulf completed its first week, some retailers reported the fighting has had a slight effect on their business.

However, January is the slowest month in the retail year and the storeowners did not appear concerned by a dip in their sales.

When the war broke out last Wednesday night, J.C. Penney Co. Inc. had ″a drop-off in business and then over the weekend it picked up again,″ said spokesman Duncan Muir.

Muir attributed the ″downward blip″ to people staying home to watch news of the fighting on television.

Hills Department Stores Inc. suffered a slight decline in sales during the past week, said Eugene O’Donnell, the discounter’s executive vice president for merchandising.

″You have to have to attribute a lot of it to the war situation,″ he said.

Other retailers said they could not determine any impact of the war on their business. At Kmart Corp., January sales appear to be faring better than the discounter had expected and showed no adverse effects from consumer concerns about the fighting, spokeswoman Mary Lorencz said.

Retailers whose sales were affected by the war have little to lose - even in the best of times, the industry attaches virtually no significance to January results. Consumers generally take a breather to pay their bills after Christmas while stores run winter clearance sales to make way for spring merchandise.

″It’s a slow time of the year,″ said O’Donnell.

Moreover, the beginning of the war came as an anticlimax for retailers, whose business slumped in August after the Iraqi invasion of Kuwait and generally has not recovered. Many retailers had a disappointing Christmas season as Americans, worried about the war, rising oil prices and the weakening economy, cut back on gift-giving.

As long as the fighting continues, consumers are expected to spend gingerly. But retailers don’t expect their sales to surge even if the war turns out to be short.

″By all indications, the recession will continue throughout most of the year ...″ Bernard Brennan, chairman of Montgomery Ward & Co., said in a statement.

″Should the war become protracted, all retailers are likely to face a downturn in sales,″ he said.

The war has generated business for some retailers.

Hills reported an increase in sales of U.S. flags and T-shirts with patriotic emblems. And Kmart was stocking its stores with patriotic T-shirts and sweatshirts because of customer demand, and the company has sold more flags and yellow ribbons than ususal, Ms. Lorencz said.

Some electronics retailers said their sales of radios have picked up over the last week as Americans sought to keep abreast of the latest war news.

Sears, Roebuck and Co. ″experienced a significant increase in sales of radios″ at its Brand Central departments, spokesman Perry Chlan said.

Hills also reported a slight increase in radio sales.

Savemart Inc., a New York-based chain of television and appliance stores, reported its traffic was up over the past week, but mostly because of passers- by stopping to watch the latest news reports.

Susan Blank, Savemart’s merchandise manager, said the phenomenon has happened in the past - the Challenger explosion in 1986 and the Iran-Contra hearings the following year also drew the curious into the stores.

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