Could it be that the recession Grinch has not entirely stolen 1990's Christmas?
With the economic news dominated by signs of obvious weakness, and some of the nation's biggest retailers singing dirges rather than carols, the holiday season might seem to be over before it begins. But now come some surprising indications that many of the country's largest specialty retail chains are quietly preparing for much stronger than expected Christmas business - with early indications that sales will be up anywhere from 6 percent to 25 percent over last year.When I chatted in Los Angeles the other day with Sam Merksamer, president of the 80-store Merksamer Jewelers, he told me that his firm was doing remarkably "good business," with sales for the last weekend of October even better than on 1989's weekend after Thanksgiving - traditionally the year's busiest shopping weekend.
Nor is Merksamer's experience unique. The Taubman Company, which manages 20 large shopping centers from coast to coast, has just surveyed senior executives of nearly 50 major tenants, specialty retailers representing more than 20,000 stores, and their mood is nowhere near as gray as the headlines about gloomy analysts would lead you to believe.
"There is no doubt that we're in a difficult business environment, but we were skeptical about all the gloom-and-doom prophesies heading into the holiday shopping season," Gary D. Doyle, Taubman Company group executive vice president, told me. "To get a firsthand forecast, we surveyed a cross-section of the major retail chains found in our shopping centers and other locations throughout the country. We expected to hear a more balanced point of view, but we weren't prepared for the overwhelmingly positive response we received. The majority of the retailers said their sales have been way up over the last couple of months, and most expect holiday sales increases over last year."
Some of the upbeat specifics:
- At Laura Ashley, with 190 fashion and home-furnishing stores in the United States, president Terry Smith reported that he now expects "a very good season," with sales up nearly 25 percent.
- At Natural Wonders, a 35-store retailer of nature-related merchandise, president Robert S. Rubenstein said the firm had revised its holiday forecast based on exceptionally strong fall sales and now feels "very optimistic about the whole season."
- The Gap, with 749 stores, reports September sales up 8 percent over last year.
Retailers anticipate particularly good holiday sales in books, electronics, records, movies and home-entertainment merchandise. ("We're emphasizing the benefits of in-home entertaining," says Bruce Bausman, senior vice president of the 100-store Suncoast Motion Picture Company. "The less money people have for discretionary spending on entertainment, the more they spend on themselves at home.")
Retailing is historically one of the nation's toughest and most competitive businesses, and store executives do not survive by being Pollyannas. They read the papers too, and they are concerned that if public confidence takes a dive, their forecasts could prove overly rosy. The result will be extra efforts this season to bring in the customers - efforts that could prove especially advantageous to wise shoppers.
Some tips from the insiders: Look for continued price wars, including discounts, two-for-one offers, free gifts with purchases, featured special values, credit card tie-ins and vacation giveaways. Expect "the best customer service you've seen in years," and look elsewhere if you don't get it. Shop early, not only because you won't have to wait for the eleventh-hour sales to find discounts, but because selections may dwindle rapidly. ("When retailers think times may be tough, they buy the best products, but not as deep," observes Arnie Bernstein of Music-land and Sam Goody, with more than 800 record stores.)
In short, economic sluggishness has scarcely taken the retailers by surprise (Mark Bowman of Gantos stores notes that the entire "second half of the year has been promotional"), but the result of this increased customer attention has been to produce receipts greatly in excess of the overall economic forecasts. As La-Moine Adams of Kinney Shoe Corp. put it, "We've seen bad times, but we don't think these are anywhere near as bad as people are saying." Sad-dam Hussein may not have killed Santa Claus, after all.