Early Reports on Sales Ring Up Retail Optimism

Retail sales rose moderately over the Thanksgiving weekend compared with last year, according to preliminary reports Sunday from mall operators and a retail services company.

Analysts are predicting sales 3% to 5% above last year’s levels. Shopping centers and many major retail chains will report their actual weekend sales results today.

Also, some retail executives said there are already signs of a new pattern in shopping, with consumers buying more gift items for their own families and homes this holiday season.

On Friday, the traditional start of seasonal buying, national sales rose to 2.2% over the same day a year ago, according to TeleCheck Services, the Houston-based check acceptance company. The report does not include cash and credit card acquisitions.

Purchases by check in Southern California were virtually flat--declining 0.5%, TeleCheck said. The value of the average Southland check on Friday was $88.82--just cents less than a year ago--but consumers in the region wrote fewer checks. “Retailers have been trying to get consumers to buy more gifts in October and November,” said TeleCheck economist William Ford. “That might account for the flat performance in the Los Angeles area. Retailers may have generated more sales earlier--taking away some of their Friday business.”

Consumers, said Ford, make about 33% to 38% of their purchases by check. He predicted that Dec. 20--a Saturday--will be the biggest sales day of the holiday season. The Friday after Thanksgiving is rarely the top day for holiday sales; it ranked fifth a year ago. However, about 8% of holiday season sales are generated during the Thanksgiving weekend.

Rain in the Southland on Sunday dampened business and weather could continue to hurt retailers in the region this winter, Ford said.

“If El Nino creates heavy rain in Southern California, that would be a cause of concern,” said Ford.

Ford and other economists maintained their sales predictions of 3% to 5% holiday sales growth. For example, Ira Kalish, a Los Angeles-based retail economist for Management Horizons--the retail consulting arm of Price Waterhouse--expects moderate gains of 3% to 4% for both Southern California and the nation.

“That’s a real gain of 3% to 4% because there is virtually no inflation,” said Kalish. “Although the economy is strong, there is reason to believe there will be a bit of a slowdown early next year. High consumer debt is a hindrance to spending, and recent stock market volatility may have a small negative effect on spending.”

The International Council of Shopping Centers was a bit more upbeat Sunday. It said customer traffic on Friday increased 5.5% over last year.

“That’s a strong turnout and a good sign,” said John Konarski, a vice president with the trade group.

Although there were no figures available Sunday, major retailers said early indications were positive.

Macy’s, for example, said weekend sales appeared to be ahead of last year’s pace.

“It was successful,” said Michael Steinberg, chairman of Macy’s West, the San Francisco-based division that operates the chain’s Western stores. “I think it will be a good Christmas.”

A spokeswoman for the Minneapolis-based Dayton Hudson Corp.--operator of the Target and Mervyn’s chains--said the turnout was “encouraging” in Southern California and throughout the nation.

Sears, Roebuck & Co. was also upbeat. The company met its sales goals for Friday and Saturday, and its Southland stores performed as well as those in the rest of the nation, said company spokeswoman Jan Drummond, who cited some new purchasing trends.

“This seems to be the holiday season for family and personal purchases,” she said. “We’re seeing strong sales in the home-appliance category, and big-screen TVs, camcorders and tools are doing well.”

Sweaters and slacks for men were strong sellers as were dresses--an item women tend to buy for themselves, said Drummond.

Store managers at Target and Mervyn’s also observed more consumers buying for themselves or their home, said Gail Dorn, a spokeswoman for the chains. Bread-making machines, pillows, and bed comforters were among the strong sellers, she said. Sales of fragrance sets and jewelry were up, Dorn said.