Crowded Stores Buoy Hopes of Retailers

Early-bird specials, balmy weather and increased consumer confidence helped fill Southern California shopping centers Friday, raising retailers’ hopes that this holiday season will surpass last year’s dismal sales.

Early-morning shoppers huddled in a brisk breeze outside Bloomingdale’s new store at Century City Shopping Mall, motorists jammed the freeways near Laguna Hills Mall and the Ontario Mills outlet center, and throughout the day, anxious parents scrambled to find the hot new Nintendo 64 game system.

This year’s holiday shopping sprint will be a challenge for retailers, however. Thanksgiving’s relatively late arrival trimmed five shopping days from the season compared to last year, and some Southern California malls had more gawkers than shoppers.

But confident store operators, buoyed by the heavy turnout, say they’re sticking with rosy preseason estimates of a 4% to 6% sales increase.

Early returns from Sears, Roebuck & Co. put the retailer on track toward a healthy increase nationwide, and Macy’s West Chairman Michael Steinberg said his chain’s California locations seem to be slightly ahead of last year’s pace.

And some shoppers said that they were ignoring budgets and instead paying attention to their shopping lists.

“I bought more than I needed,� laughed Sonia Quijada, a Monrovia resident who, by 11 a.m., had filled four shopping bags and was ready to sign a $300 credit card receipt at the Macy’s perfume counter at Santa Anita Fashion Park in Arcadia. “And this is just the beginning.�

That’s the kind of consumer response that retailers will need if the industry is to avoid a repeat of last year, when skittish consumers balked and holiday sales increased a disappointing 2.5%.

The first shopping day after Thanksgiving rarely ranks as the top sales day of the holiday season. Last year, for example, it finished seventh, with Dec. 23, the last Saturday before Christmas, the busiest day.

But the Thanksgiving weekend historically drives 8% of total holiday sales and, just as important, jump-starts the shopping season that drives 30% or more of the industry’s annual profits.

“You see a lot of families out on Friday,� said International Shopping Center Council Vice President John Konarski. “And when you’ve got the kids in tow, it’s hard to shop. But they’ll be back later on--without the kids.�

Friday’s sales totals won’t be available until Sunday, but some retail industry experts suspect that shoppers are not as bullish as retailers.

“This year will be a moderate success, with the emphasis on moderate,� said Kurt Barnard, a New Jersey-based retail industry consultant. “The malls were packed, you couldn’t find a parking space, but there were very few shopping bags in evidence.�

Retailers are anxious to study totals for the full month of November to see if shoppers were out in force before the start of the official shopping season, which this year is only 26 days long.

*

“It’s not the loss of five days that’s important to us, it’s the crucial fact that we have one less weekend,� said Vaneta Rogers, a Chicago-based spokeswoman for Sears. “Our typical shopper is busy during the week and counts on weekends to do her shopping.�

Despite the short season, the National Retail Federation predicts that holiday sales will jump to $466 billion, up from a disappointing $440 billion last year, and the shopping center council predicts that holiday sales will rise by 4.9%.

The outlook isn’t quite as bright in California, where some households are still struggling to regain their economic equilibrium. The New York-based Conference Board’s consumer confidence index is 20 points above the level reached a year ago--but the business group reports that consumer confidence in the Golden State still trails the nation.

Joan Felthan, though, sees signs of optimism. For 15 years, she spent the day after Thanksgiving selling dresses at the Broadway department store in Downey. But this year, the Broadway is gone and Felthan, two years retired, enjoyed “being on the other side� as a shopper at the Century City Shopping Mall.

*

To Felthan’s practiced eye, this looks to be a good holiday season for retailers: “The atmosphere is so different, people are so bubbly and the weather is gorgeous. . . . And the prices are OK--maybe a little cheaper.�

Retailers were working hard to lure shoppers into their stores during what’s typically a long holiday weekend for many Southern Californians.

Kmart stores were open for business on Thanksgiving Day and Wal-Mart is keeping some of its busier locations open around the clock. Sears and Toys R Us were among the growing number of national chains that opened at 7 a.m., and Circuit City and Best Buy were promising no payments for a year on big-ticket items.

Toys--including Barbie and TurboMan--were in demand around the country, and Kay-Bee toy stores from Santa Anita Fashion Park in Arcadia to Jersey City, N.J., reported waits of up to two hours at checkout counters.

But there will undoubtedly be disappointed kids on Christmas, given the shortage of Nintendo 64 game systems and cartridges.

“We sold out of that three days ago,� lamented Mike Cantu, general manager of Kmart’s Monrovia store. “It hit off better than Sega [did last year].�

Retailers also reported strong interest in moderately priced apparel and accessories. Retailers tie increased demand for clothing to the fact that consumers who ignored their wardrobes in recent years are now in the market for replacement clothing.

Jewelry sales, which typically rise along with consumer confidence, were up noticeably Friday, according to Sears and the shopping center council’s Konarski.

Three polls and a Commerce Department report released Friday buttressed the retail industry belief that Americans are ready to spend.

*

Pamela Ainsworth, a 22-year-old Long Beach State University student who works as a waitress, offered a more down-to-earth measure of consumer confidence: Diners are leaving bigger tips. “People are not trying to save every penny,� Ainsworth said.

Americans continue to run up credit card debt, but, so far, there’s no indication that the $1 trillion in debt now being carried will cut deeply into the season’s sales totals.

Burbank teacher Lynn Koontz, 29, said she’s fighting the urge to throw caution to the winds and charge her way through the holiday season. “Every year I go into debt. This year, I promised myself I wouldn’t do it. I’m saving, and I’ve set a budget.�

Despite shoppers’ good intentions, however, Fredericks, Md.-based Ram Research Group predicts that card use will jump by 13% as consumers rack up an additional $116.3 billion in credit card debt.

Retailing experts are forecasting a strong performance by high-end retailers whose customers are reaping the benefits of the bullish stock market.

The shopping day started slowly in Beverly Hills but picked up about noon, said Rolfe G. Arnhym, executive vice president of the Beverly Hills Chamber of Commerce.

“In a place like Tiffany, it was almost standing room only. It was jammed, jammed,� Arnhym said. “The important thing is people have shopping bags in their hands. These are serious folk bent on a purchase or purchases.�

Chuck Henry, a salesman at Macy’s at South Coast Plaza, told of a couple who walked in shortly before noon to purchase three Swiss watches that retail for $2,850 each.

And Kristi Mai, a Garden Grove college student, bought her boyfriend of six years a $650 Gucci watch at a South Coast Plaza store. “He’s had his eye on it for a while,� she said. “I wanted to get him something nice.�

However, some retail industry observers say that moderately priced goods will do well this year because many shoppers are hamstrung by tight budgets.

“The lion’s share of the improvement this year will be enjoyed by Sears, Penney and shops with moderately priced merchandise,� Barnard said. “If you’ve got that kind of stuff, then this will be a healthy year.�

There was no shortage of customers at the Wal-Mart store at Anaheim Plaza, where the massive store’s 26 cash registers were ringed with customers toting TurboMan toys, video games and merchandise tied to Disney’s “101 Dalmatians� feature film.

While apparel and toys are expected to lead the holiday shopping parade, the picture is cloudier for chains like Best Buy, which sells computers, electronic goods and appliances. Fierce competition is forcing price cuts that are eroding already thin profit margins.

Individual chains won’t have hard numbers for Friday’s sales until Sunday at the earliest. But anecdotal evidence suggests that the first official day of the season was relatively healthy.

*

“We started out extremely strong,� said Macy’s Steinberg. “We’re doing better than last year. Based on early readings, I’d say we’re a few percentage points ahead of last year.�

Minneapolis-based Dayton Hudson Corp.’s Target and Mervyn’s chains “were very, very busy in the morning,� said spokeswoman Susan Eich. “All the anecdotal evidence says that we’re doing better than last year.�

But despite the rosy predictions, retailers remain wary because sales could tumble if consumer confidence slips or Mother Nature plays tricks with the weather.

Retailers also know that their fate will undoubtedly be tied to shoppers like Doug Crawford, who strolled through Westside Pavilion on Friday--but who won’t start shopping in earnest until late in December.

“I like to shop at the last minute,� Crawford said. “I like that panicky feeling.�

Contributing to this report were Times staff writers George White, Nancy Rivera Brooks, Marla Dickerson, Lee Romney, Jill Leovy and Tom Gorman, and special correspondents Melinda Fulmer, John Canalis and Mayrav Saar.