Spirited shopping Retailing: The Christmas shopping season appears to have arrived early this year, and the predictions are that it will turn out to be a fine season, indeed.

November 23, 1997|By Lorraine Mirabella | Lorraine Mirabella,SUN STAFF

That Christmas sweater under the tree this year could generate more than body warmth -- it could help heat up the holidays for retailers.

With consumers feeling confident and poised for spending during the critical selling season, retailers are counting on apparel gift-giving to deliver solid, if not stunning, sales.

Analysts agree, anticipating that sales overall will increase moderately over last year, anywhere from 3.5 percent to 5 percent. And as apparel sales perk up, analysts say, department stores and discounters will benefit.

Which is fine with Brian Paulsen, manager of J. C. Penney in Owings Mills Town Center.

"People would rather have customer service than save an extra $3," said Paulsen, who said shoppers already have gotten serious about Christmas -- even before the traditional start of the season on the Friday after Thanksgiving.

And what are they buying?

"This seems to be the year of the sweater -- don't ask me why. Sweaters seem to have gone on fire," Paulsen said. "People have a sense that everything's going OK -- that gives them the confidence to spend money."

Such confidence has flourished in a climate of stable interest rates, wage gains, low inflation and unemployment, said Kenneth M. Gassman, retail analyst with Davenport & Co.

This Christmas season, shoppers will spend an average $779 per person, 2 percent more than last year, according to the National Retail Federation. The trade group anticipates sales will reach $472.2 billion, up 3.8 percent from $455 billion last year.

But Gassman warned that retailers should not look for gangbuster sales. Credit card debt has reached record highs; consumers now wait longer to shop to catch the best bargains -- and presumably spend less -- and more people are spending holiday budgets on travel.

"It's going to be a good, solid Christmas, slightly better than last year," Gassman said. "It's not horrible, but it's not fabulous. That's sort of a ho hum -- maybe a 'ho ho' hum."

Maryland retailers will likely see a 4 percent increase for the fourth quarter, said Don Alderson, research economist with the Regional Economic Studies Institute at Towson University. That's better than last year, when sales rose 2 percent. But it's still far below levels reached earlier this decade, in part because people are saving more and the state still suffers lingering effects of previous low consumer confidence, compared with the rest of the nation.

"It will be a decent year, but nothing to write home about," said Tom Saquella, president of Maryland Retailers Association, which expects members' sales to increase an average 3.5 percent. "People, to the degree they can, are putting money in the stock market. And people are more interested in having events around Christmas. There are only so many disposable dollars."

Sales of men's apparel -- especially casual wear -- have been strong this fall, said Timothy F. Finley, chairman and chief executive of Hampstead-based men's retailer Jos. A. Bank Clothiers Inc. But overall, consumers have shifted their spending habits.

"People buy for need," he said. "You don't have the discretionary wild spending you had in the '80s. People are more apt to buy something they need when they need it. They don't go crazy at Christmas anymore."

Holiday spending reports from the retail federation bear that out. Sales had jumped by 5.6 percent in 1987 and by 9.7 percent in 1988. Spending has continued to beat the previous year's each year since, but in 1995 the increases began to dip. Spending rose by only 2.8 percent that year, and by 3.4 percent in 1996, the federation said.

To capture bigger shares of fragmented business, retailers must offer perceived value, said David H. Nevins of retail marketing consultant Nevins and Associates.

"The retailer of the '80s that was selling on price alone can't make it today," he said. "Consumers are more discriminating."

"They are increasingly looking for value for their shopping dollar," he said. "Value means something that cost $100 ought to be worth $100. People don't go out today and brag about how much they spent on an item. They brag about what a good value they got for what they spent."

At Security Square Mall, where toy and jewelry specialty stores have been among the busiest so far, managers are trying to lure shoppers in earlier with discounts and giveaways. Shoppers who collect $300 in receipts between Nov. 28 and Dec. 24 get a free $40 Fila sweatshirt.

"Toys seem to be an area where parents are shopping early so they can get the specific toy on their child's Santa wish list," said Deirdre Moore, the mall's vice president and general manager. Consumers are also buying custom jewelry, she said. "Those are two areas I've seen substantial foot traffic. Customers know what they need to get. I don't get a sense that people are scaling back."

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