Retailers Expect To Recover From A Bruising Christmas

Sales Plummeted In The Worst Season Since 1982

December 31, 1990|By Lorraine Mirabella | Lorraine Mirabella,Staff writer

Christmas may have brought no lumps of coal to the county's retailers, but the shopping season has left some merchants with lumps of another sort.

Although many managers had braced for a slow, recession-plagued season by trimming prices and expenses, they emerged from the crucial month clearly disappointed -- and expecting more of the same.

"With all the economic uncertainty, it's been a trying time," said Paul O'Connell, director of operations for Annapolis Clothing Co. "We're running flat, dead even with what we did last year. There are certainly no increases to be had."

Like other local retailers struggling through the three months in which stores typically reap half their annual sales, Annapolis Clothing reacted by slashing prices, earlier and lower than usual.

"When Macy's and Hecht's took 40 to 50 percent off early in the month, we responded by doing the same thing," he said. "We had to pull out all the stops to entice the customer."

Overall, shoppers appeared more budget-conscious this year and tended to choose practical gifts over big-ticket and luxury items. Not until a few days before Christmas did customers descend on the stores in a mad rush.

"The last week or so before Christmas, sales really picked up," said Sarah Elder, manager of sales and marketing for Harundale Mall. "It's not one of the years that would stand out, but they did very good the last two days."

But most retailers needed more than procrastinators' last-minute spending frenzies to top last year's sales.

At one Glen Burnie apparel shop, the manager lamented a drop in overall sales from last year of as much as 30 percent.

"Most of the stores are like that," said Nazi Kazi, manager of Benetton.

"It's everywhere, not just retail."

Retail analysts estimate that nationally this could be the worst season since the 1982 recession, with the month's sales lower than last year's by 1 percent to 5 percent. The reasons, analysts say: the recession, high interest rates, worries about unemployment and the Persian Gulf crisis.

Locally, the picture looks much the same, said Tom Saquella, president of the Maryland Retail Merchants Association.

"Sales are running about equal or a little behind last year," he said, adding that stores selling such higher-priced goods as jewelry and electronics seemed to fare the worst. "We're seeing a good degree of caution on the part of the consumer. They are careful about how they're spending their money, spending it on less expensive items and more practical items."

"The customer today is really price-sensitive," said Skip Briggs, president of the clothier G. Briggs. "He's looking for quality items. The price has to be right or he's not going to part with his money."

The price must have been right, he says, on the women's and men's sweaters and flannel shirts his stores kept selling out.

"It was a very difficult season, but we sold way more than we anticipated," Briggs said, so much so that he intends to keep spring prices at levels below last year's. For example, last spring, the chain priced all wool and wool blend men's suits at more than $200. This year, 80 percent will be priced below $200, he said.

The merchants association expects retailers to continue keeping tight controls on costs, inventory, hiring and prices in 1991.

Businesses that had planned expansions most likely will wait, but few retailers are in danger of going out of business because of one slow year.

Retailers "recognized it would not be a great holiday season for record sales but kept costs under control and have come through the year all right," Saquella said.

A few have even come through better than all right, some merchants say, though they might have lowered their expectations.

"We did better than our sales goals. We surpassed them," said Ron Montgomery, manager of K-mart in Glen Burnie. "But we're the exception, not the rule."

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