Deck the Halls, Clear the Shelves

U.S. retailers have their best Christmas ever

Americans rammed Christmas 1977 through a Cuisinart food processor, flashed it on a Comp IV desktop computer game, scented it with Chanel No. 19 and set it to play with Star Wars toys. Those items sold briskly this Christmas, as did women's underpants labeled "Bloomie's" (for Bloomingdale's, the big Manhattan department store) and hundreds of other expensive baubles for the kitchen, bedroom, bath and body. When the buying spree ended on Christmas Eve, U.S. retailers, as exhausted as their customers, could look back on their most successful Christmas ever.

Sales increases over the 1976 Christmas season ranged from 8% to as much as 30% in some areas. The Commerce Department last week reported that retail sales, excluding autos, were 12% higher than a year earlier in the four weeks ending on Christmas Eve; in the final week the gain was 16%. Even when a rise of about 6% in retail prices between the two Christmases is discounted, the sales gains are solid--and the buying momentum continued into last week as postholiday sales began. At 8 a.m. Monday, the day after Christmas, shoppers began lining up outside a Bullock's department store in Los Angeles in a drenching rain, waiting for the doors to open.

More than in Christmases past, Americans spent money for high-priced quality items. "It was a luxury kind of Christmas," says Hal Silver, chairman of Kaufmann's in Pittsburgh. Adds Gordon Cooke, senior vice president for sales promotion at Bloomingdale's: "Price was no object." The French-made metal-housed Cuisinart, which slices, dices, chops, minces and shreds faster than conventional individual tools, sells for $225. Yet it and lower-priced competitors (La Machine, Omnichef) flew off shelves so fast that almost no store could seem to keep them in stock. Neiman-Marcus in Houston sold 24 West German-made exercise machines ($2,000) before running out.

Stereo equipment moved rapidly, as did video-tape recording devices like Sony's Betamax (about $1,000). Trendy boots ($175 and up), gold stickpins for women, $5,400 coyote fur coats and $200 cashmere bathrobes also helped speed the buying avalanche. Says Val Holwerda, a vice president of Bullock's: "Anything soft and romantic sold well."

Sales were considerably helped by Sunday openings in many states, including New York. The legislature in Massachusetts, whose "blue laws" banning Sunday business go back to pre-Revolutionary times, gave in and allowed shopkeepers to stay open on the four Sundays before Christmas. Officials made little effort to enforce Sunday closings even where the law requires them. In Baltimore, some retailers stayed open the Sunday before Christmas, defying the Maryland legislature, which had considered and rejected Sunday openings. One store was fined $100 and the others got away with mere warnings.

Why did shoppers buy so much? Retailers have a simple explanation: rising personal incomes and a general feeling that their jobs are secure have put consumers in a happy mood. That impression conflicts with polls that show much doubt and worry about the state of business, but retailers have the sales figures on their side. Says Larry Straus, vice president of Colorado's May D & F stores: "People have more confidence in the economy and are willing to spend their money. Inflation doesn't seem to bother people as much." Adds Kaufmann's Silver: "I got the feeling people were happier and less uptight than last year. There were more of the jingle bells afloat."

Consumer confidence in the economy could become a self-fulfilling prophecy of sorts. Many storekeepers, bitterly recalling the stockpiles they got stuck with after the recession Christmas of three years ago, bought only enough this year to cover the sales gains they expected and got. Their shelves are now cleaned off, and will have to be restocked. So store orders to manufacturers for more merchandise could give the whole economy a lift during the first quarter and well into spring.

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