It’s a Do-or-Die Weekend for Stores Hoping to Lift Sales
After nearly a month of disheartening holiday sales, Southland merchants are bracing for what they hope will be a three-day sales blitz, the retail equivalent of hanging shiny new ornaments on an otherwise sagging Christmas tree.
Hit hard by the economic slowdown, department store executives and small shopkeepers alike say they hope that the malls will bustle and cash registers will ring starting Saturday and running through Christmas Eve.
Consumers who have postponed making gift-buying decisions will finally be forced to act--or wait until next year. Merchants, forced to keep sweetening the pot with sales and discounts, will have one final chance to move merchandise off the shelves before having to slash prices for after-Christmas sales.
“I don’t think (merchants) have faced a time in recent memory where three days have been more important to them. This can be the difference between an OK Christmas and a very disappointing year,” said Richard Giss, partner-in-charge of the Retailing Services Group for the accounting firm Deloitte & Touche in Los Angeles.
As if to foretell the comeback, the blast of cold arctic air this week was being welcomed by store owners as a way to put people into the Christmas spirit, into malls and into expensive jackets and ski gear.
The calendar is also giving retailers reason to keep fingers tightly crossed. The season has been a little longer, with five weekends since Thanksgiving Day instead of four. And more important, since Christmas Day falls on Tuesday, shoppers are likely to take Monday off or work only a partial day. As a result, merchants believe that Christmas Eve may be one of the busiest shopping days this year.
A three-day shopping period before a holiday typically adds 6% to 8% to sales revenue for the month, said Rita Mincavage, manager of merchandise publicity for J. C. Penney’s Southern California stores. “You can say that about any holiday, but what’s really nice is this holiday is Christmas,” she added.
Although the busy Christmas Eve shopping day could add a lift to sales, retailing executives say they would rather have seen the buying season pick up speed earlier.
“It’s certainly a big plus as far as shopping goes, but it’s a mixed blessing because it makes it more likely people will put off their shopping and retailers would like to see them get in there early,” said E. Harlin Smith, a spokesman for Carter Hawley Hale Stores, owner of the Broadway Southern California, Weinstock’s, Emporium and Broadway Southwest chains.
Late or not, every sale will be appreciated as merchants reel from the weak economy and heavy debt from the takeover wars. The federal government reported that November sales fell 0.1% compared to the same month in 1989. The National Retail Federation, a trade group, has said the figures indicate that “we’re probably in a recession.”
Department stores and others have responded by increasingly upping the ante to try to lure shoppers. Price reductions ranging 20% to 50% have been common during the season.
In an effort to boost sales of big-ticket items, Sears, Roebuck and Co. offered 0% financing starting Thursday on appliances, furniture, home electronics and carpeting costing more than $200. J. C. Penney is starting its traditional “after-Christmas sale” on Saturday, three days before the holiday.
Other major chains say that no matter what it’s called, a sale is a sale and they are having one. “You can call it whatever you want to,” said Edgar S. Mangiafico, chairman of May Co. California.
Problem is, sales eat into profits. A price-cutting binge may offset the surge in volume derived from a last-minute shopping stampede.
“Even if they can bring customers in the door, the fact is that discounting hurts earnings,” said Sandra Shaber, an economist and management consultant for The Futures Group in Washington.
Sarah Stack, an analyst for the stock brokerage Bateman Eichler, Hill Richards in Los Angeles, adds that no matter how busy the three days turn out to be, it will be hard to recoup from five flat weeks.
“I don’t (see) this weekend bailing out what is expected to be a less-than-jolly Christmas for most retailers,” she said.
Many retailers agree. Said one San Diego sporting goods store manager: “I don’t think this weekend will save the season; I’m just hoping to break even.”
Department store executives say they have seen a trend for years toward shopping later in the season, particularly as consumers become more bargain hungry and have less time to shop.
But one thing that retailers could never plan on was the onslaught of cold, wintry weather that has gripped the Southland the past few days. Finally, it’s beginning to look a lot like Christmas.
Jim Chick, president of the Covina-based Chick’s Sporting Good chain of six stores, said the weather should help heat up icy sales of winter and ski gear.
Shoppers who wait too long, however, may pay an unexpected price for their procrastination. Some key items may be sold out by Christmas Eve. Retailers who anticipated a rough Christmas season severely cut their inventories so they would not be stuck with warehouses full of unsold merchandise after the holidays. So some of the more popular items may be sold to the bare walls--and without discounts. “We may hear some stories after Christmas of some stores that ran out” of certain items, said Smith at Carter Hawley Hale.
Although overall retailing has been off, there have been some regional bright spots.
Some San Diego retailers, for instance, are hoping that the return of the aircraft carrier Independence from duty off the Persian Gulf will flood the city with free-spending sailors.
And liquor store owners are expecting a sales blitz of their own that should last through New Year’s Eve. But it isn’t because of cold weather or a three-day holiday, just drinkers wanting to beat a new round of alcoholic beverage taxes that take effect Jan. 1.
Times staff writers Chris Kraul and Tom Furlong contributed to this article.
