Retailers Report Modest Sales Gains
The nation’s retailers reported unexpectedly modest sales gains overall during November, but they aren’t ready to predict a blue Christmas.
“Christmas has been coming later each year for retailers,” said Kenneth Macke, chairman and chief executive of Dayton Hudson Corp., parent of Dayton Hudson, Mervyn’s and Target stores. “We don’t see this year as being an exception to that trend.”
“I’m very bullish on December,” said Edgar S. Mangiafico, chairman of May Co. California. Because Christmas falls on a Thursday this year, compared to Wednesday last year, “obviously we’ve got extra time this Christmas and I think there’s every indication people are going to shop more.”
Wal-Mart Gain of 38%
November sales increases reported by the nation’s major retailers ranged from 1.2% at J. C. Penney to 38% at Wal-Mart Stores, whose sales figure was boosted by 155 new stores opened in the past year.
Sears, Roebuck, the nation’s largest retailer, said its sales for the four weeks ended Nov. 29 rose 2%, compared to year-ago figures. Chairman Edward A. Brennan said men’s, women’s and children’s clothing led other categories of merchandise. K mart, the second-largest retailer, reported a 7.3% sales gain.
November sales were “soft” because of the “ripple from strong auto and housing sales,” said Jeffrey Edelman, a retail analyst with Drexel Burnham Lambert.
“It means nothing as far as Christmas is concerned,” Edelman said, noting that November is considered the end of the fall selling season. “Christmas is a new season,” he said.
“I think that November was a decent month for sales, and I expect a decent Christmas,” said analyst David Jackson of Morgan, Olmstead, Kennedy & Gardner in Los Angeles. “It’s not going to be a gangbuster month, but it’s going to be decent.”
Strong October sales had led to expectations of healthy November gains, but unseasonably warm weather in many parts of the country, particularly in the West, melted shopper enthusiasm for such traditional winter merchandise as sweaters and jackets, retailers said.
“The warm weather did hurt business,” said Bill Dombrowski, a spokesman for Carter Hawley Hale Stores, whose stores include Broadway, Neiman-Marcus and Contempo Casuals.
Nonetheless, Carter Hawley expects a “moderate” 5% to 8% sales increase during the holiday season, he said. Carter Hawley had a 5% sales gain last month.
Dayton Hudson noted that its sales were strong in the Midwest but “noticeably weaker” on the West Coast. Particularly slow was the company’s Hayward, Calif.-based Mervyn’s chain, which has 89 stores in California out of a total of 175 outlets.
Mervyn’s is “experiencing gross margin pressures resulting from a highly competitive West Coast retail environment,” the company said. However, Target, with 37 California stores out of 247, did well in California during November, a Dayton Hudson spokesman said.
Analyst Jackson said he doesn’t expect widespread sales this month because “inventories are in very good shape. There will be promotions, but it will be merchandise specifically purchased for promotions--not so much stale merchandise” that couldn’t be sold at full price, he said.
Major Retailers’ Sales in November
In millions Year % of dollars 1986 ago change Sears 2,737 2,685 +2.0 K mart 2,042 1,903 +7.3 J.C. Penney 1,357 1,341 +1.2 May Dept. Stores 1,010 939 +7.6 Federated* 979 906 +8.0 Dayton Hudson 949 837 +13.4 Wal-Mart Stores 1,274 925 +38.0 Woolworth 320 316 +1.2 Montgomery Ward 413 403 +2.3 Carter Hawley Hale 397 378 +5.0
*Excludes supermarket sales. Excludes foreign sales.
Los Angeles Times
