Back-to-school sales may pass, may fail Outlook is uncertain, as traditional buying season now is diluted hTC

August 29, 1996|By Alec Matthew Klein | Alec Matthew Klein,SUN STAFF

Good. Bad. Or middling.

Those are the ideas on how sales will shake out during the back-to-school selling season, perhaps the most important time for retailers other than Christmas -- although even that distinction is now in doubt.

"The question is, is there a back-to-school selling season these days?" mused analyst Kenneth M. Gassman Jr. of the Richmond, Va., investment house Davenport & Co. "We're seeing back-to-school starting later and later. It doesn't carry the same weight that it once did."

The tradition of parent-child shopping excursions in August and September, driven by apparel sales, has been diluted by today's relaxed dress code, schools that have adopted uniforms and others that have gone year-round, according to analysts.

"A thing of the past" is what the International Mass Retail Association is calling back-to-school shopping. "Consumers today are a savvy and sophisticated group, and they really buy on an as-needed basis," said association spokeswoman Carolyn Johnson.

As-needed, however, isn't as predictable.

One point of view: Customers are "opening up their pocketbooks, they're not as uneasy," said retail guru Mark A. Millman, president of Lutherville-based Millman Search Group Inc., forecasting an upswing in back-to-school spending fueled by a stabilizing economy, low interest rates and the end of major corporate downsizing.

Another point of view: "I think we're rebounding in '96, but it's a question of how great the rebound's going to be," said Tom S. Saquella, president of the Maryland Retailers Association.

And a third: "It's a real mixed bag," said Charles W. McMillion, president and chief economist of MBG Information Services, a Washington-based business analysis and forecasting firm.

Riding the information technology wave, electronics and computer retailers are expected to do reasonably well, he said. Apparel retailers, wallowing in a prolonged slump, are not. Big discount retailers, tapping into the frugal frame of the day, are looking up; small specialty shops are not.

"Consumers are really strapped in Baltimore, as is much of the country, with very high debt, very low savings, and wages are stagnant pretty much across the board," McMillion said.

Not unlike last year. Which means that back-to-school results this year may be like last year's. Sales in stores open at least a year, a key indicator of performance also called same-store sales, are expected to be modest and virtually unchanged from last year's results -- rising 2 to 3 percent for Baltimore -- or flat, if inflation is factored in, McMillion said. Nationwide, retailers also are expecting a rerun, with same-store sales bumping up about 2 percent above inflation.

State sales tax collections, however, suggest that Maryland could fare better. June sales revenue, the last month for which figures are available and typically the state's second-biggest month for sales taxes after December, rose 6.2 percent to $186.2 million, compared with the same period last year. Last June, sales revenue collected by the state grew only 1.1 percent compared with the same period in 1994, according to the Maryland comptroller's office.

Computer hardware and software have led the recent surge, increasing by 21.4 percent to $4.5 million in June, while apparel and general merchandise have grown 3.8 percent to $41.5 million.

"We have seen a very nice recovery in consumer spending in the state since about March," said economist Ann Franklin of the Maryland Comptroller of the Treasury.

If so, Maryland could return to its successes in 1994 when retailers poured $163.4 million into state coffers in August sales taxes, an 11 percent increase over 1993. Last year, reflecting an industry-wide malaise, retailers recorded $165.6 million in August sales taxes, inching up 1.3 percent over 1994.

Nationally, numbers are improving modestly as well. The Commerce Department recently reported that retail sales rose 0.1 percent in July, surpassing expectations of a slight decline.

Whether retailers can sustain that pace over the course of the back-to-school season will depend in large part on bell bottoms, polyester and floral designs -- preferably in neon green, hot pink and other bright colors. Those are among the trendy tastes this season among those discriminating consumers, teen-agers.

"Customers no longer are going in [to stores] and taking for granted that's the best price they can get," said Lori Marler, marketing manager of Security Square Mall.

Pub Date: 8/29/96

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