Consumers held down their spending at the nation's major retailers in November, but many merchants said Thursday that shoppers have picked up the pace since Thanksgiving.
In general, industry analysts described retailers' November showing as disappointing, with the spending slowdown most notable in the month's first half. However, analysts were divided in their opinions of how dicey the important Christmas season would be and what consumers' holiday spending might mean for the economy in general.
"My theory is there will be more bad news before good news," said William N. Smith, with the New York investment firm of Smith Barney, Harris Upham & Co.
But Walter F. Loeb, with Morgan Stanley & Co., said he has turned more upbeat about Christmas since hearing reports from some merchants of double-digit gains in the post-Thanksgiving period. "Retailers have pulled out all the stops and promoted effectively," he said. "I look for most retailers to do well."
Despite some dire predictions, Sandra Shaber, an economist with the Futures Group in Washington, said she still does not "think that the risks of an outright recession are very high. I'm still optimistic to that degree."
For the November period, K mart and J. C. Penney won faint praise for running somewhat ahead of the pack. Sales at K mart stores open at least a year rose 4.5%, while Penney reported a 3.8% comparable-store gain. For all stores, including those opened within the last year, K mart had a sales gain of 6.6%, and Penney showed an increase of 4.3%.
But the Limited--a women's apparel retailer that has suffered from an oversupply of sweaters and merchandising problems at its Lane Bryant large-size division--was singled out for its poor showing, with comparable-store sales declining by 5%.
Among retailers overall, analyst Smith said the November "results were disappointing, but in line with what they'd been signaling." Analyst Edward F. Johnson of Johnson Redbook Service in New York, who estimated the overall retail group's gain at only 3% to 3.5%, said the results were dragged down by the troubled sector including women's ready-to-wear retailers, which have been particularly hard hit by the spending slowdown since August.
Carter Hawley Hale Stores, the Los Angeles-based parent of the Broadway department store chain, reported a paltry overall gain of 0.7% for the four weeks ended Nov. 28, with gains of only 0.5% at stores open at least a year.
'Trend Very Steady'
Spokesman Bill Dombrowski said the company had been expecting such results and planned accordingly. "The slowdown in consumer spending began in the third quarter before the (Oct. 19 stock market) crash," he said. "This has been one of the easiest Christmases to read in years because the trend has been very steady."
He cautioned against equating soft sales gains with weak profits. "If you built a game plan around those expectations, you can have a very profitable Christmas," he said.
Dayton Hudson, based in Minneapolis, saw comparable-store sales slip 1.8% in November, primarily because of an 11% decline at its Midwest department stores and a 5% decline at the Target discount operation. Comparable-store sales at the company's troubled Mervyn's division rose 6%, but the results were compared to a weak period last year.
Kenneth Macke, Dayton Hudson chairman and chief executive, said the retailer remains cautious about Christmas despite what he called a "stinko" performance at the department stores. "It is very unpredictable at this stage," he said. "Christmas has come later every year. I don't think it's going to be as bleak as some people might think, but by the same token it won't be anything we classify as great, either."
Among other retailers reporting November results, Sears, the nation's largest merchant, reported a scant 0.7% sales gain. May Department Stores, parent of May Co. California and J. W. Robinson, said sales at its department store and other chains rose 2% on a comparable-store basis. Federated Department Stores, which owns Bullock's and I. Magnin, said gains at its stores, excluding the Ralphs Grocery operation, rose 0.9%.
MAJOR RETAILERS'SALES IN NOVEMBER
In millions Year % of dollars 1987 ago change Sears 2,757 2,738 +0.7 K mart 2,142 2,010 +6.6 J.C. Penney 1,416 1,357 +4.3 May Dept. Stores 985.8 934.4 +5.5 Federated* 817.6 810.6 +0.9 Dayton Hudson 1,040 899.9 +15.3 Wal-Mart Stores 1,598 1,273 +26.0 Montgomery Ward 451.0 419.5 +7.5 Carter Hawley Hale 246.9 245.2 +0.7 * Excludes supermarket sales.