Many of the nation's big retailers reported Thursday that their sales picked up strongly at the end of December, but the recovery came too late to rescue merchants from perhaps their worst Christmas season since the 1982 recession.
Shoppers finally flocked to the stores in the days immediately before and after Christmas, only after prices were marked down sharply. "Consumers held back to pick the bargains," said Walter F. Loeb, a New York retailing consultant.
Even with the increased last-minute business, however, the December sales reports released Thursday generally were weak. The result, industry experts said, is that retailers' profits for the crucial holiday season generally will fall below the meager results of a year ago.
The weak sales during the holidays--when many retailers make half of their yearlong earnings--were blamed largely on consumers' eroding confidence in the face of the national recession and the Persian Gulf crisis. Analysts predicted that sales will remain weak, and markdowns will be widespread, for much of this year.
"Consumers will be frugal until they see better things happening in the economy," said Thomas H. Tashjian of Seidler Amdec Securities in Los Angeles. "They need to be comforted more."
Tashjian said that markdowns will be particularly common in Southern California, where merchants generally have been surprised by the soft sales.
Most retailers reported that sales were up slightly or down at stores open more than one year--a key gauge of industry performance known as same-store or comparable-store sales. Prudential-Bache Securities' index of 47 retailers showed same-store sales rising 2% from December, 1989.
But taking into account inflation--which is running at more than 6% this year--the figures would look far worse, with most retailers' losing ground from last year.
One of the few star performers was the Gap, a San Francisco-based apparel retailer praised by analysts for its consistently attractive prices and merchandise. Its same-store sales climbed 12% and its overall sales rose 24%.
Another big gainer was the Dominguez-based close-out chain, Pic 'N' Save, which apparently benefited from a trend among consumers to hunt for bargains. Its same-store sales climbed 9.4% and its overall sales increased 16.6%.
The weakest category of retailing in December appeared to be the department stores, which have been losing price-conscious consumers.
Among the weaker performers was Los Angeles-based Carter Hawley Hale Stores. It owns the Broadway-Southern California, the region's biggest department store chain, and three other Western chains.
Carter Hawley's same-store sales fell 3.7% in December, while its overall sales sank 1.7%. Other department store chains with Southern California stores posted weak same-store results, too.
Nordstrom said its same-store sales were off 1.5%, though newly opened stores lifted its overall total by 10%. May Department Stores of St. Louis--the nation's biggest department store company and the owner of Southern California's Robinson's and May Co. California chains--posted a 1.2% same-stores decline but a 9.1% overall sales gain.
J.C. Penney said its same-store sales fell 0.3% while its overall sales inched up 1.5%.
Discount stores fared better. Still, even Bentonville, Ark.,-based Wal-Mart, considered one of the nation's premier retailers, showed a somewhat smaller than usual increase.
Its same-stores sales climbed 6%, versus a gain of 8% in December, 1989. At the same time, the company's aggressive store-opening program led to an overall sales increase of 28% for the month.
Among other discounters and mass merchandisers, Sears, Roebuck & Co. posted a same-store decline of 0.3% and an overall gain of 0.4%. Kmart showed a 1.2% same-store gain and a 4.6% overall gain.
Minneapolis-based Dayton Hudson's results reflected the split between higher-price department stores and other retailers. Its Midwestern department stores posted flat results while Mervyn's, its low-price department stores, posted a 1% same-store gain and Target, the company's discount chain, showed a 4% same-store gain.