Retail Sales Drop Amid Fears Of War And Recession County Stores Sales Off 4.6% In October

December 02, 1990|By Erik Nelson | Erik Nelson,Staff writer

With the belt-tightening prospects of a recession and war looming, retail sales in the county declined about 4.6 percent in October as compared with October 1989, and local merchants say they expect to see bigger drops during the holiday shopping season.

"Everyone's talking about not spending money, and I think it's scaring a lot of people," said Jeff Niclason, manager of Columbia Bicycle in the Wilde Lake Village Green. Sales are up slightly at the bike shop, but short of expected gains, Niclason said.

"It's sort of a vicious cycle: People start talking about it and then they start believing it. It's a matter of confidence, really."

Merchants say they noticed business starting to drop as events in the Persian Gulf heated up.

In July, before Iraq's invasion of Kuwait, taxable sales totaled about $103 million -- a 6 percent increase over July 1989. August sales, at about $91 million, were down about 0.1 percent from August 1989.

The decline from 1989 sales continued in September, with a 2 percent drop to about $91 million, and October, with its 4.6 percent drop to about $95 million.

At The Mall in Columbia, sales receipts increased in August, but dropped in September to the lowest levels in two years for any month, said Danielle Morgenthaler, the mall's sales and marketing manager. She blames the downturn on the Kuwait invasion and federal workers' furlough fears during budget negotiations.

With runaway gas prices, "people are definitely spending less on other things to compensate," said Kathy Chambers, owner of Suitable Shirts on Main Street in Ellicott City and a member of the city merchant association's board of directors.

Combine high fuel prices and uncertainty about the future, and people start to think a little harder before parting with their money, she said.

"People in the past might come in and be willing to spend maybe $50 for someone on their list and I think this year they're more conscious of price," Chambers said. She estimated that her store's November receipts will match last year's, instead of posting the 10-percent increase she had projected at the beginning of this year.

Like many other merchants in Ellicott City, Chambers is stocking lower-priced items, offering shirts in the $30 to $40 range instead of the usual $50 to $60 range, and has added hair accessories and small leather goods priced under $20.

Chambers's fellow Ellicott City merchants also have responded to the downturn, expanding their Dec. 7 "Midnight Madness" Christmas shopping festival to include carolers and shuttle buses from county government parking lots for two extra days.

"We're actually spending more to compete for those dollars," Chambers said, adding that $1,000 for the extra shuttle bus trips will come from a corporate sponsorship by the Crab Shanty restaurant in Ellicott City on Route 40.

Other retailers, such as manager Gwendolyn Calhoun of the Fan Club athletic shoe and clothing store in the mall, say they have also noticed shoppers' price-consciousness and tried to compensate by having special sales.

"People are going around to all the stores before they make a decision," Calhoun said, estimating her holiday sales at 20 percent below last year's.

All over the mall, the usual sale signs have been replaced with tantalizing discounts, many of them advertising 40 or 50 percent discounts.

On one recent day, Jen Amann, a Benetton clothing store employee, worked steadily with a black marker making a stack of paper "25% off" signs to be taped to every rack in the store.

A larger sign in the entrance says, "50 percent off a selected item. A different item on sale every day."

The sales were recently cooked up in response to sagging sales, said Benetton manager Aaron Kushner, adding that there would be another sale closer to Christmas.

Kushner said that this year, his customers are "definitely more particular. They want something that's going to last them more than one season before it goes out of style."

Even so, he said he still resists the temptation to use the high-pressure sales tactics some stores have resorted to in the name of "customer service."

At the mall's Pinstripe Petites, manager Carrie Corfield has also noticed customers "not spending as frivolously as they were." While her store is doing better than it was last year, she said she is concerned about the mall's department stores taking away her business.

One woman came to price a blouse and left, telling Corfield she planned to come back the next day, when the Hecht Co. put the item on sale.

"We rely heavily on the anchors (department stores) to get the people to come in," Corfield said, but she said she worries that the department stores, with special weekly sales, are competing for a share of the smaller stores' market.

Some stores saw the retailing slump coming and say they have managed to stay ahead by broadening their inventory and "working tighter," or lowering markups to increase volume.

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