Shoppers Tightfisted; Holiday Sales Sluggish Consumers Likely To Wait Until Last Minute To Go On Buying Binge

There was little cheer in the retail industry Thursday as November sales figures confirmed that the Christmas shopping season had a shaky start.

While business was strong the day after Thanksgiving, with consumers snapping up special deals for early shoppers, sales slackened Saturday and Sunday. Consumers were again cautious and waiting for a better deal.

But there is still hope that the season will turn out well for some storeowners. The general feeling among analysts and retailers is that consumers are going to wait until the last minute, especially since Hanukkah is later this year than in 1994, and because there’s a full weekend of shopping before Christmas Day.

The industry’s November performance “shows a continued reluctance of the consumer to spend, although I am confident that the late Christmas will stimulate late buying and there will be a buying surge. The December period will be quite strong,” said Walter Loeb, a retailing consultant and analyst.

Many people will be late shoppers because they expect - and may well force - retailers to slash prices. That is likely to wreak havoc on some retailers’ profits during their most critical time.

“There’s not anything that people absolutely have to have, and so they’re waiting for it to get down to 50 percent off,” said Woody Whyte, an analyst with Stephens Inc. in Little Rock, Ark.

Apparel retailers, as expected, did poorly last month compared with weak results of a year earlier. Some discounters also struggled.

And department store operators, also expected to have a fairly good Christmas, came up short. Federated Department Stores Inc., whose holdings include Macy’s, Bloomingdale’s, Burdine’s and Bon Marche stores, said its results were disappointing.

But retailers, ever the optimists, tried to put a good spin on November’s results. Federated Chairman Allen Questrom said, “It’s advisable not to read too much into the month’s results as a forecaster of the Christmas selling season.”

Some companies did well. Sears, Roebuck and Co., expected to outperform the industry during the Christmas season, had a good start, reporting strong business across its merchandise categories.

And some high-end retailers had good news. Tiffany & Co. told analysts on Wednesday that it enjoyed strong November sales.

In other economic reports Thursday:

The Commerce Department said that durable goods orders declined 1 percent last month as demand for aircraft, automobiles and military hardware plunged.

The Labor Department said the number of American workers filing first-time claims for jobless benefits fell to a five-week low last week. The decrease of 16,000 was the largest drop in nine weeks.

But analysts said job growth is slowing and the decline last week might be due in part to closing of government unemployment offices for the Thanksgiving holiday.

The Chicago Purchasing Management Association said manufacturing in the Midwest contracted in November.

The Mortgage Bankers Association of America said weekly mortgage applications plunged 30.8 percent last week. The group said the Thanksgiving holiday could be the reason.

Graphic: Sales of top general retailers