Sales Figures Confirm Dismal Holiday Season For Major Retail Chains Disappointing Season Called ‘One Of The Worst In Many Years’

The nation’s retailers confirmed Thursday that the Christmas shopping season was a severe disappointment, one that recalled the dark days of the 1990-91 recession.

Several prominent retailers, including J.C. Penney Co. Inc., Limited Inc. and Woolworth Corp., reported sales declines as the big storeowners released their December sales figures. Others who had tiny sales gains said they were disappointed by their showing.

The results of the nation’s biggest retailer, the usually strong Wal-Mart Stores Inc., showed how bad the season was. Wal-Mart said its sales from stores open at least a year rose just 1.1 percent, compared with past holiday seasons when the discounter enjoyed gains in the high single digits or double digits.

Another indicator came from Salomon Brothers Inc., which said its monthly retail sales index rose 1.8 percent, the smallest gain for a December in the 10-year history of the index.

“It was one of the worst in many years,” said Joseph Ronning, a retail industry analyst with Brown Brothers Harriman Inc. “Consumers remained very cautious and kept their pocketbooks closed till the last minute - and even then they weren’t in a hurry to spend.”

There hasn’t been such widespread disappointment over a Christmas season since the recession. But this season was marred not only by extreme consumer caution, but by problems the retailers have created for themselves.

Some companies did flourish. Sears, Roebuck and Co., which thrived all season long at the expense of its competitors, said its sales from stores open at least a year, known as same-store sales, rose a healthy 6.8 percent. Upscale retailers like Tiffany & Co. also did well.

But apparel retailers, falling deeper and deeper into a slump caused by too many stores selling clothing the public doesn’t want, continued to be the hardest hit. Besides Penney and Limited, Talbots Inc. and Charming Shoppes Inc. reported sales drops.

Still, there were pleasant surprises even in the apparel sector. Gap Inc. had a 6 percent same-store increase. Ronning said the company had “the right merchandise, the right look.”

As bad as the numbers were, retailers are expected to have worse news when fourth-quarter profits are announced in February. Merchants hope to make half their annual profits during the final quarter, but the heavy markdowns many stores took will eat into their earnings.

Retailers were forced to discount merchandise because consumers, knowing they could get bargains by waiting, put off the bulk of their shopping until late in the season.

But the sales figures also suffered because there are so many stores in this country that retailers are cannibalizing each other’s business. Too many merchants are fighting for a limited number of consumer dollars.

The new year is expected to be even more depressing for the retail business. There are several big discounters in bankruptcy proceedings, and more retailers are expected to join them when supplier bills are due this month.

Many retailers will be forced to close stores. More than 1,000 apparel stores were marked for closing last year, and that number will undoubtedly increase in 1996.

Looking at the results for December:

Wal-Mart said its total sales rose 12.1 percent. But same-store sales are considered a better way to assess a retailer’s strength.

Sears had a total sales gain of 7.3 percent. The company has improved its image and merchandise selection during the past few years.

Kmart Corp. said its same-store sales rose 4.5 percent, while total sales gained 2 percent.

Dayton Hudson Corp. said samestore sales were up 3 percent, with total sales rising 9.8 percent. The company warned that discounting would cause its fourth-quarter earnings to fall below expectations.

Penney said same-store sales fell 4.2 percent, while total sales fell 1.4 percent.

Federated Department Stores Inc. reported a 1.3 percent samestore sales gain, and a 64.4 percent total sales rise. The total sales figure reflects the acquisition of R.H. Macy & Co. Inc. and Broadway Stores Inc. over the past year.