Six Fewer Shopping Days : Jittery Retailers Start Christmas Push Early
Time was when Americans could celebrate Labor Day, get through Halloween and even digest Thanksgiving dinner before turning their thoughts to Christmas. But in recent years many retailers have jumped the gun, installing holiday boutiques by mid-October and making it all but impossible for customers to keep the season at bay.
Consumers are giving in: Shopping malls were already unnavigable last weekend--a full week before the season’s traditional kickoff. Retailers, however, seem reluctant to trust such signs and continue to fret because Thanksgiving is six days later this year than last, thus shortening the traditional Christmas shopping season.
To lure shoppers early and keep them happy through the season, stores across the nation have devised a variety of strategies. For instance, Weinstock’s, a Sacramento-based division of Carter Hawley Hale Stores, is emphasizing customer service, right down to serving refreshments to those in the gift-wrapping line.
Ready-to-Go Gifts
“You can’t do away with the wait entirely, but you can make it more pleasant,” said Cheryl Turpin, the chain’s president and chief executive.
In Chicago, Carson Pirie Scott is spotlighting in-store Christmas Express and Arcadia boutiques, where customers can find modestly priced, trendy gifts wrapped and ready to go. It also has added Santa’s Enchanted Village, where children can get an introduction to gift buying.
Wal-Mart has struck special bargains with manufacturers on some products and is passing the savings along to customers at its 845 discount department stores in the South, Southwest and Midwest. Although these aren’t Christmas promotions per se, they “will have an impact at this time of year,” according to spokesman Jim Von Gremp.
For many retailers who need a strong fourth quarter to bolster a so-far disappointing year, the strategy will be to instill a sense of urgency. Perhaps the most blatant example of such marketing is a TV commercial by Hasbro for its Transformer robot toys, in which Alex Karras advises parents “to get ‘em before Thanksgiving weekend.” The idea is that procrastinators might encounter spot shortages of certain hot-selling items.
Some Bargains Likely
However, savvy shoppers will be tempted to hold out for the kinds of bargains that materialized last year after merchants panicked and slashed prices. There should be good hunting, analysts say, even though retailers this year have inventories under better control and have made smarter buying decisions.
“The environment is highly promotional (but) is not likely to be as suicidal as last year, when retailers were under pressure from heavy inventories,” said Thomas P. Farley, an analyst with Salomon Bros. in New York. Shoppers will continue to see plenty of promotions on items that retailers have bought at attractive prices and can advertise without jeopardizing gross margins, he said.
Carter Hawley Hale, the Los Angeles-based parent of Neiman-Marcus and the Broadway, has been running a series of planned one- and two-day promotions at its stores. Spokesman Bill Dombrowski said the company foresees a highly competitive season that will result in soft sales increases.
Many retailers agree, expressing at best cautious optimism about this all-important fourth quarter, which can account for as much as 40% of a company’s annual revenue and 60% or more of its profits. For the industry as a whole, analysts foresee sales gains of 5% to 6% over the same quarter last year, when the industry averaged increases of 8% to 10% over the year before.
The last time that gains were so modest was in 1981, when the country was in the midst of a recession, analyst Kenneth M. Gassman Jr. of Wheat, First Securities noted. His Richmond, Va., firm expects that unseasonably warm temperatures will continue to put a damper on apparel sales in the Southeast. In addition, consumers are heavily in debt and savings rates are low, leaving little disposable income for gift buying. As a result, Gassman foresees a “good, not great, not poor” Christmas for retailers.
In many parts of the country, a faltering regional economy has added to retailers’ woes. In Houston, where the energy industry is on the ropes, the unemployment rate is more than 8%, about 1 percentage point above the national rate. Moreover, currency problems have curbed spending by Mexican and South American visitors.
Ironically, as the economy has slowed, competition has heated up because of the opening of stores that were planned four to five years ago when the oil industry was booming.
Al Lubetkin, vice chairman of Houston-based Oshman’s Sporting Goods, acknowledged the area’s troubles but said his company decided to avoid cutting prices more than usual during Christmas.
“We’re trying not to give away the store,” he said.
Specialty Stores Gaining
During the last three years, Oshman’s has experienced marginal sales increases overall but year-to-year declines at stores open during both reporting periods. It owns 180 Oshman’s and 25 Abercrombie & Fitch stores.
Some segments of retailing, notably specialty stores, are outperforming department stores and mass merchandisers such as Sears, K mart and J. C. Penney.
The Limited, a fast-growing fashion retailer based in Columbus, Ohio, is quite sanguine and has no plans to cut prices during the holidays.
“We expect Christmas business to be very good,” said Al Dietzel, vice president for financial and public relations. The company operates 2,470 stores under such names as Limited, Limited Express and Victoria’s Secret.
R. H. Macy & Co., the big New York department store known for its lavish Thanksgiving Day parade, plans not to stray from its usual heavy promotions and one-day sales, according to spokeswoman Judy Cohn. The company anticipates sales gains of 8% to 9% in November but will not forecast December sales.
One rather unscientific barometer is worth noting. Western Temporary Services, based in Walnut Creek, Calif., reports that demand for Santa Clauses is up 15% over 1984, when the company placed 3,000 Santas nationwide. Usually, a spokeswoman said, stores and malls are more likely to hire Mr. Claus when they expect weak sales.
