Holiday Sales Fail to Surge in Shopping Finale : Retailing: Although analysts say it is too early to know how stores fared overall, early predictions of smaller profit margins appeared to hold true.
The generally sluggish Christmas shopping season came to an unspectacular climax over the weekend, with many stores failing to draw enough of the last-minute business they needed to score healthy sales and profit gains from a year ago.
Sales picked up, as expected, during the last few days before Christmas, but “business was not rambunctious,” said Thomas H. Tashjian, an analyst with Seidler Amdec Securities. “People were not out in droves the way one might think they’d be.”
Added Bill Dombrowski, vice president for Los Angeles-based Carter Hawley Hale Stores: “It was busy or steady, but there was no big bang” in sales over the weekend.
Analysts cautioned, however, that it still is too early to determine precisely how retailers fared overall during the holiday season. Results appear to be widely mixed from one retailer to another and, in Southern California and elsewhere, even from one shopping mall to another in the same community.
There also are signs that smaller specialty shops have picked up some of the business that big retailers have lost. In addition, the week after Christmas traditionally is busy, although nothing to compare to pre-Christmas sales.
Still, the latest indications are that this year’s holiday shopping results generally will square with analysts’ previous predictions: sales gains in the 5% to 8% range, but slimmer profit margins because of the rampant price-cutting offered to bring reluctant customers into the stores.
On Monday, retailers tried to put the best face on their results. Sears, Roebuck & Co., the nation’s biggest merchandiser, said its holiday season sales are “a little below” the level of a year ago.
But Ernest L. Arms, a company spokesman, said it is “quite a performance” anyway because Sears somewhat narrowed its range of merchandise and, overall, cut its prices as part of adopting an “everyday low prices” strategy this year.
The state attorney general of New York, however, filed a false advertising suit against Sears last week, claiming that the prices for 20 specific items remained the same or were actually raised since Sears switched to the “everyday low prices” format. Sears denied the charges.
Arms said Sears enjoyed strong increases in sales of men’s and children’s apparel, car batteries, other automotive items and catalogue merchandise. Much weaker were its sales of furniture, other home furnishings, home improvement products and women’s fashions.
At Bloomingdale’s, the prestigious New York-based department store chain, spokeswoman Katie Locke said her company is encouraged by its sales gain in the 5% to 10% range for the holiday season so far. After posting a sales increase of about 25% during Thanksgiving weekend, Bloomingdale’s business leveled off for three weeks and then picked up again just before Christmas, she said.
“For most retailers, it was one of the most difficult Christmases in recent years,” Locke said. “So,” she added, “we’re very happy with what we netted out.”
Carter Hawley Hale, parent of the Broadway department store chain in Southern California, reported that its holiday sales were “on plan” but up only modestly from a year ago. Dombrowski said the company was hurt by snowstorms in the Southeast, where its 26 Thalhimers stores are located, and by the Bay Area earthquake, which damaged some of its Emporium outlets.
But the picture was much brighter for Minneapolis-based Dayton Hudson Corp., whose Target Stores and Mervyn’s chains make it one of the biggest retailers in California. Dayton Hudson bucked the general trend among other big retailers on two fronts: first, it chalked up what it called “very good sales increases” and, second, the company did it while offering fewer markdowns than a year ago.
In Southern California, the contrast between the holiday season’s winners and losers appeared to be sharp. Analyst Sarah A. Stack of Bateman Eichler, Hill Richards said she was struck by how busy big malls such as the Westside Pavilion and the Glendale Galleria were while business was slow at smaller shopping centers in the area.
At the Promenade Mall in Woodland Hills, parking spaces were easy to find over much of the weekend while nearby Topanga Plaza was jammed.
Also, at the South Coast Plaza in Costa Mesa, retailers over the weekend continued to post gains over a year ago. Maura Eggan, marketing director for the plaza, said most stores have posted sales increases in the 12% to 15% range all year, and that they appeared to be doing roughly as well during the last week before Christmas.
The most successful stores, Eggan said, tended to be high-end specialty shops such as Tiffany, Lenox China and Gucci.
Elsewhere, specialty food stores reported brisk sales. David Gronsky, manager of the Bristol Farms store in South Pasadena, said business has been up about 20% this Christmas season, largely because of increased gift buying.
He said the store was selling lots of baskets of items such as cheeses, caviar and wines. “People are looking for different kinds of gift ideas,” Gronsky said.
