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Wrapped Up in Optimism : Retailers Expecting a Big Holiday Shopping Season

November 15, 1994|GEORGE WHITE | TIMES STAFF WRITER

OK, as voters they might be discontent. But as shoppers, Americans are expected to open their wallets wider this holiday shopping season. The nation's retailers have prepared themselves with bulging inventories in anticipation of what various polls and prognostications suggest may be the richest year-end shopping spree in five years.

The latest evidence is a national survey released Monday that shows widespread optimism among retailers about prospects for this holiday season. The survey--sponsored by the accounting firm Deloitte & Touche--said 77% of retailers expect higher sales at their stores, compared to the 62% who expected increases a year ago.

The survey indicates that Southern California retailers are even more optimistic about their holiday prospects. The survey shows that 83% expect higher sales, compared to just 48% who expected increases last year.

While the Deloitte & Touche survey shows a more upbeat view among retailers than among consumers--and other samplings have painted a mixed picture--the consensus among executives and experts who track consumer behavior is for spending increases of anywhere from 5% to 10%. They say it is a simple reflection of a strengthened economy.

"Consumers are more positive because there is less unemployment," said Allen Questrom, chairman of the Federated Department Store chain. "We expect a good holiday season."

Holiday shopping surveys attract attention because they are often an indicator of consumer confidence. And this holiday season holds the potential to accelerate or stall the current economic recovery during the final 45 shopping days of the year, economists say.

The Deloitte & Touche findings are based on responses from 1,014 retailers and 1,005 consumers nationwide. They are more optimistic than a recent Gallup Poll sponsored by the International Mass Retail Assn., which also turned up evidence that people plan to spend more this year, if only slightly.

A year ago, the Deloitte & Touche survey results were similarly more upbeat than other groups' attempts to predict holiday retail sales--and were closer to the mark, as a late-season buying surge made 1993 the most profitable holiday season for retailers in four years.

"Consumer attitudes are much more positive than last year," said Harvey Braun, co-chairman of the Trade Retail & Distribution Services Group of Deloitte & Touche in New York.

Nationally, consumers plan to spend an average of $714 this holiday season, an 11% increase over last year's average of $646, the survey found. Consumers in the West plan to spend an average of $659, up 21%.

The Gallup survey predicted average nationwide spending of $700 per consumer this year, compared to $685 last year.

A recent Federal Reserve Board report on economic conditions also said retailers in most of the country are optimistic about holiday retail sales growth. In addition, some credit card companies are expanding credit levels, to the delight of retailers.

Nationwide, demand for apparel will generate much of the additional spending this year, said Questrom, whose Federated operates Bloomingdale's and is nearing the final stages of a merger with R.H. Macy & Co., operator of Bullock's and I. Magnin.

Questrom predicts that designer apparel and children's clothing with symbols and logos from television's "Mighty Morphin Power Rangers" and Disney's movie "The Lion King" will be big sellers. Bullock's and other department stores also expect luggage, cookware and home furnishings to be popular this holiday season, Questrom said in an interview.

Major retailers have already acted on such forecasts. Kmart spokesman Ron Pauli said his chain's inventories are "well-balanced to take advantage of stronger consumer demand."

Stores at Century City Shopping Center in Los Angeles are also stocking more heavily in anticipation of a brisk season. Doug Roscoe, the center's general manager, said merchants expect menswear, consumer electronics and home furnishings to be top sellers.

"Our tenants are expecting gains in the 12% range," he said.

At Westminster Mall in Orange County, most stores are already reporting strong customer traffic and increased sales over last year, marketing manager Stephanie Greene said.

"We're seeing people buying more . . . big-screen TVs, luxury personal items, high-tech electronic products and the like," she said.

Executives at the Glendale Galleria expect a 5% to 10% sales increase for the last 45 days of the year. Sales at the Westside Pavilion could jump as much as 15% over last year, mall marketing director Mary Lankester said.

Times staff writer Greg Johnson in Orange County contributed to this report.

Holiday Sales Outlook

Most forecasters see strong holiday retail sales this year as the economic recovery continues, with spending in the West--dominated by Californians--weaker than elsewhere. But one survey finds retailers markedly more optimistic than consumers' plans would suggest:

Consumers and retailers are showing more confidence in spending...

What consumers say they'll spend and what retailers expect:

Spend more:

Consumers: 19%

Retailers: 45%

*

Spend same:

Consumers: 56%

Retailers: 47%

*

Spend less:

Consumers: 22%

Retailers: 8%

...but consumers in the West say they plan to spend the least.

Dollar amount consumers plan to spend:

Avg.: $714

Northeast: $739

South: $740

Midwest: $701

West: $659

Source: Deloitte & Touche

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