U.S. issues gloomy 1991 retail report December no holiday for area merchants

January 15, 1992|By Michael Dresser

At Suitable Shirts in Ellicott City, owner Kathy Chambers saw her sales last month drop 20 percent from the previous December. One of the reasons was the gas company truck parked in front of the store for most of the month, tearing up the street to repair a main.

Figuratively, the entire U.S. retail economy had a gas truck out front last month. And the month before. And for most of 1991.

The Commerce Department confirmed what virtually everyone had expected as it issued yesterday one of the bleakest retail sales reports ever. The most-watched number was December's surprising 0.4 percent decline in sales from the previous month. But that was far from the most gloomy number in a report that was even more grim than expected.

For the entire year, retail sales increased by a puny 0.7 percent -- less than the rate of inflation and the weakest year-to-year gain in 30 years, the report said. November's seasonally adjusted 0.3 percent gain went up in smoke -- revised to a 0.5 percent decline. And December was a particularly cruel month for department stores, as sales declined 2.2 percent despite a yuletide blitz of margin-mauling sales promotions.

"I don't think any of the analysts were looking for numbers that poor," said Kenneth M. Gassman Jr., a retail analyst at Davenport & Co. in Richmond, Va., who had expected a December gain of as much as 1.5 percent. "This is one of the most pessimistic sales reports I've seen." He added that if the December number were adjusted for inflation, the decline would be about 3 percent.

The 1991 holiday shopping season has been closely watched for any signal of hope that America's consumers would lead the country out of recession. Yesterday's report made the answer official: No.

Jared Hazleton, director of the Center for Business and Economic Analysis at Texas A&M University, said the retail downturn "varies widely from region to region," with sales in Texas running about 4 percent ahead of last year and the Eastern Seaboard lagging.

Maryland, of course, is in the heart of recession territory, and its retailers probably fared a bit worse than the country as a whole.

At Ms. Chambers' women's apparel store on Ellicott City's historic Main Street, the recession arrived far ahead of the BG&E truck. While national apparel sales were up a petite 0.8 percent for the year, her sales plunged -- coming in 9 percent below 1990, she said. That's not as grim as it looks, she added, because she kept inventories low and avoided markdown madness. "Regardless of sales figures being down, I'm in good shape financially," she said.

Many large retailers won't be able to say that when they report their fourth-quarter earnings next month. "I don't think the earnings reports are going to be anything to crow about," said Budd Bugatch, director of institutional research at Ferris Baker Watts in Baltimore.

At Koren American Traditional Furniture on U.S. 40, manager Gregg Marcinski said there was an abrupt falloff in business at the upscale Catonsville store after Thanksgiving. Nationally, furniture and related stores lost 0.1 percent of sales in December and 0.4 percent for the year, the government figures showed, but Koren's decline in sales was even steeper, he said. Business was off by as much as 20 percent from 1988-1989, he said.

And at Win Kelly Chevrolet in Clarksville, co-owner Kevin Bell said his results in 1991 weren't much better, with sales for the full year off about 20 percent, compared with a national gain of 1.8 percent. Sales at the dealership in November and December -- when national automotive sales dropped 1.5 percent then 1.1 percent -- were "essentially equivalent" to last year, he said, but "you're comparing a weak period with a weak period."

[The news worsened further yesterday as automakers reported that sales of domestically made cars and light trucks remained at recessionary levels in early January, declining 4.1 percent from a dismal year-earlier period, the New York Times reported.]

The restaurant and tavern segment was one bright spot in the Commerce Department report, with a 1.5 percent gain in December and a 5.9 percent jump for the year. But most downtown Baltimore restaurateurs weren't invited to the party.

"Not in this town," said Tom Herrmann, manager of Burke's Cafe, a downtown mainstay at Lombard and Light streets, who said sales were basically flat compared with last year. Michael Gough, manager of Phillips Seafood Restaurant at Harborplace, said sales were down 4 percent from December to December.

Even the grocery business, traditionally an island of stability in the choppy retail seas, has been affected by the recession. Bill Miller, president of the Mid-Atlantic Food Dealers Association, said sales figures in Maryland would probably reflect the nation's anemic results: an 0.3 percent December gain, with full-year sales up only 0.5 percent.

"Generally speaking, sales are flat," he said. "You do have to eat to live, but you don't have to eat the prepared foods."

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.