Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, November 12, 1994 TAG: 9411140062
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: CLAUDINE WILLIAMS STAFF WRITER
DATELINE: LENGTH: Medium
Although a new national survey predicts shoppers will be cautious - even frugal - in the coming holiday season, Roanoke-area retailers have stocked their stores and say they're optimistic that consumers will spend.
"I think people say they won't spend much, but they will come in the stores and buy just like they always have," said Anne Armistead, owner of Millie & Co., a women's apparel shop in Salem. "It is almost impossible to spend less unless you just completely cut people off of your list."
Armistead said her store increased its stock by about 18 percent compared with last November in preparation for increased holiday sales.
The poll, conducted by the Gallup Organization, found 57 percent of the 1,000 consumers surveyed plan to hold spending to last year's level, and another 25 percent plan to spend less. Only 17 percent of those surveyed said they would spend more in the period prior to Hanukkah and Christmas. The survey was commissioned by the International Mass Retail Association, a Washington, D.C.-based trade group.
Economists warn that rising interest rates will eventually rein in consumer spending. The Gallup Poll's findings seem to confirm that consumers are hunkering down again, though not so much that it is likely to spoil the holidays for America's merchants.
Bargain hunting will be in vogue, Gallup found: 76 percent of respondents said they will shop at discount department stores, such as Wal-Mart and Kmart, substantially higher than the 57 percent who intend to do at least some of their shopping at mainline department stores, such as Sears and Macy's.
And retailers say people are willingly spending their money sooner in the shopping season.
"Early indications say that this is going to be a great season," said Terry Ray, manager of M.J. Designs, a discount crafts store in Roanoke. "People are buying just about everything, and we are selling Christmas trees like candy."
According to the Gallup Poll, apparel will be the most popular gift, with 30 percent of those polled saying they will spend more on clothing this year.
"People are ready to shop, they are tired of the economy being so bad," Armistead said.
The anticipated increase in apparel spending reflects a desire by consumers to buy goods they consider useful in their business lives, said Cal Martin, a Gallup vice president.
Also, 27 percent of those surveyed said they will increase their spending on toys.
"People are shopping earlier this year," said Shirley Hammond, owner of the Imagination Station, a toy store in Towers Shopping Center in Roanoke. "We are expecting a great Christmas. In August and September, we had people start buying for Christmas, and we are busy now."
Where shoppers will cut back, the Gallup survey found, is on home furnishings, hardware and liquor.
``Americans intend to be selective about what they are buying and how much they are paying for it,'' said Bob Verdisco, president of the mass retailing association.
``I think the holidays will be fair,'' said Howard Davidowitz, chairman of a national retail consulting company in New York City. ``I'm not looking for a tremendous amount of growth.''
``Looking beyond Christmas and into 1995, the environment for consumer spending is going to be very challenging,'' said Janet Mangano, a retail analyst for Burnham Securities in New York. ``The impact of higher interest rates is going to hit the consumer. It seems that they've almost been buying in advance'' of higher rates.
The Los Angeles Times-Washington Post News Service contributed to this story.
by CNB