California Leads U.S. in Holiday Buying Kickoff
Californians pulled credit cards, checks and even some cold cash out of their wallets this past weekend, leading the country in the rousing start of the 1994 holiday shopping season.
Shoppers around the state who used checks to pay for their purchases spent nearly 10% more Friday than they did a year ago. It was the largest increase of any state in the nation and is strong evidence that California is headed for a second straight season of higher sales.
Retailers also said their California stores rang up strong sales, indicating that the state is continuing its rebound from the recession. And Southern Californians outspent their counterparts in the northern part of the state.
If consumers in California and the rest of the country continue to give the Grinch the heave-ho throughout the monthlong shopping season, retailers said, 1994 could be their best year since the national recession began eating into retail industry profits.
For California, the initial reports are a strong sign that consumers, if not entirely optimistic about the economy, are more confident about their ability to cope, said Richard Giss, a retail consultant in Los Angeles with the accounting firm Deloitte & Touche.
Although most retailers won’t have solid numbers to report until today or later in the week, Deloitte & Touche’s survey showed that shoppers Friday were “a little more loose with the purse strings,” Giss said.
That confirms a study the firm did in October, in which California consumers reported feeling more secure in their jobs than a year ago. Holiday sales in California rebounded last year after three years of declines.
“We’ve had a rotten economy for a while now, and people now feel they can deal with it,” Giss said.
TeleCheck, a Houston-based company that is the world’s largest check-authorizing firm, said sales by check rose 12.5% in San Diego on Friday, 9.3% in the San Francisco Bay Area and 8.5% in the Los Angeles area over the same day last year.
The 12 western states, with a 7.5% increase in sales, led all other regions, according to TeleCheck, even though sales were nearly flat in Colorado and Washington and down 7.5% in Hawaii. Sales for the entire nation were up 5.7%, the company said, matching most retailers’ and analysts’ expectations.
The unusual coincidence of Sunday evening’s start of Hanukkah with the traditional Thanksgiving weekend introduction to the Christmas shopping period helped lift sales, as did markdowns and promotions by stores, credit card companies and shopping malls.
For retailers, the holiday season is the goose’s golden egg; it can account for more than half their entire year’s sales. Generally, the weekend after Thanksgiving draws as many lookers as spenders, especially when it comes as early in November as it did this year. With a monthlong shopping period before Christmas, the stores’ expectations for the weekend were modest. Many still believe that their highest single-day volume will come late in the season, as consumers continue the trend of waiting for last-minute markdowns.
Retailers have been doing all they can to counter that trend and offered treats and other incentives to early birds. And shoppers have responded.
Dayton-Hudson, which operates the Mervyn’s and Target chains as well as higher-priced department stores, did “slightly better” in California than elsewhere, with hundreds of customers at several stores in the state lined up early in an imitation of Mervyn’s “Open! Open! Open!” commercials.
In colder areas of the country, “outer wear benefited from a blast of cold air, and was a hot item,” at Dayton-Hudson’s department stores, company spokeswoman Gail Dorn said. She added that nationally, shoppers seemed to be in a jolly mood, buying items with holiday themes.
The lure of discounters continues to be strong. Consumers made poorer but wiser by the recession continue to hunt bargains even as they return to the clothing and home furnishing departments they slighted during harder times.
With many more discounters accepting plastic this year than last, credit-card sales have surged. Sales using MasterCard rose 36% to $763 million on Friday over the same day last year, and sales with that card increased 79% in the discount segment. Steve Apesos, spokesman for MasterCard International, said Visa and other credit card companies were registering similar gains.
Throngs of customers invaded I. Magnin stores, which are being liquidated as part of R. H. Macy & Co.’s emergence from bankruptcy and its merger with the Federated Department Stores chain.
More than 5,000 customers were reportedly awaiting the opening of the historic I. Magnin store on Union Square in San Francisco on Friday. When it did open, only 300 shoppers at a time were allowed in.
Sales for the entire Thanksgiving week were up about 7% over last year at stores operated by Macy, Chairman Myron E. Ullman III said in a statement.
High-ticket items such as jewelry and wide-screen televisions were among the strong sellers at stores in the giant Sears, Roebuck & Co. chain. John Costello, Sears’ senior executive vice president for marketing, called the Friday-Saturday combination the best in the company’s history.
Times wire services contributed to this report.
* BUYERS BEWARE: Credit-card fraud tends to skyrocket during the holiday season. D4
