Holiday Sales: Less Jingle This Year

Retailers always count on getting one big present at Christmas time: a surge of holiday shopping that clears their shelves and rings up about 25% of their annual sales. But this year Santa's gift to the industry turned out to be a lot smaller than usual. Right up to the end of the last full week of pre-Christmas shopping, unhappy store executives were complaining of too many open spaces at normally crowded counters or skimpy sales even in shops that were jammed with customers. Says Robert Berry, president of the San Francisco-based Joseph Magnin chain of specialty shops: "It's been a tough December."

Although the final results will not be in until the end of the month, the early returns suggest that this holiday season may turn out to be the toughest in many years. As pre-Christmas buying went into what in more prosperous times would have been full swing a week ago, nationwide retail sales were about 5% higher than they had been at the same time last year. But the fact that consumer prices have risen more than 12% since then means that in real terms, retailers' receipts have actually fallen off fairly sharply.

Hoping to brighten up their gray Christmas, many retailers stepped up their advertising and regretfully turned to pre-Christmas sales. New York's Saks Fifth Avenue department store has been offering creations bearing such labels as Pucci, Dior and Halston marked down by 50% or more. J.C. Penney near Philadelphia and Target Stores in Minneapolis slashed prices of children's toys by 20%. For the first time in its history, Rich's in downtown Atlanta opened on Sunday afternoons; several Macy's stores around New York decided to keep their doors open until 11 p.m.

Sales have been softest in such big-ticket items as major appliances and furniture. Less expensive, practical items like do-it-yourself auto tune-up kits and pocket calculators (which can now be bought for under $20) have been selling well. So, in general, have basic clothes --especially sweaters--although one executive at Baltimore's Hutzler Bros, notes that "the whole men's area is sick. The old man is the first one cut off the Christmas list."

Gold Chains. Meanwhile, many stores catering to the affluent are doing well. The Gucci shops in Manhattan and Beverly Hills are crowded. Jewelers in the workrooms of Tiffany & Co. have been working twelve-hour days to keep up with demand for the store's "diamonds by the yard" necklaces--gold chains set with diamonds and priced at about $1,000 per yd. Tiffany Chairman Walter Moving says that his store's December sales are up 18% over last year. His explanation: "This is due to excellent management, not to any early sales. Tiffany doesn't have sales."

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