TIME: Almanac 1995

home *** CD-ROM | disk | FTP | other *** search

/ TIME: Almanac 1995 / TIME Almanac 1995.iso / time / 120991 / 1209200.000 < prev next >

Wrap

Text File | 1995-02-26 | 8KB | 154 lines

<text id=91TT2726> <title> Dec. 09, 1991: Retailing:Frugal to a Fault </title> <history> TIME--The Weekly Newsmagazine--1991 Dec. 09, 1991 One Nation, Under God </history> <article> <source>Time Magazine</source> <hdr> BUSINESS, Page 54 RETAILING Frugal to A Fault </hdr><body> With their confidence at a low ebb, consumers go shopping with a relentless demand for bargains. The economy will pay the price. By John Greenwald--Reported by Mary Cronin/New York and Diana Tollerson/Atlanta As U.S. retailers brace for a gloomy holiday season, business is booming at one small Manhattan shop where Gucci bags and Brooks Brothers suits are practically walking out the door. The store's brisk business, which is up 33% over last year's, is a sign of the times. The busy outlet is the Spence-Chapin Thrift Shop, which sells classy secondhand merchandise for a fraction of its original price to support an adoption agency. "A while back, only people who never shopped in department stores came here," says manager Janine Vosburgh. "Now we are seeing young executives and the ladies who lunch. And more and more customers are picking up Christmas presents like wallets and perfumes, ties and jewelry--good buys for $5 to $15 each." Welcome to Christmas 1991. At a time when the economy badly needs some holiday cheer, Americans from all walks of life are cutting back their spending on everything from gifts to daily needs. Burdened by debt and fearful of losing their jobs, consumers are even less confident about their prospects today than they were during the painfully deep 1982 recession, according to a study released last week by the Conference Board. "Last Christmas was abysmal for many stores," says Gary Gabelhouse, chief of the consulting firm Fairfield Research, "and this Christmas will likely be worse." According to the Appert Gift Wrap Indicator, an annual survey by economist Peter Appert, store orders for holiday wrapping paper stand at their lowest level in 10 years. Since consumer spending accounts for two-thirds of the economy, the bleak mood has had the self-fulfilling effect of prolonging the slump. "I feel cautious about Christmas," says Eleanor Vincent, an employee-communications manager for Pacific Bell, which has reduced its managerial work force 17% this year. "It's mainly psychological," she adds. "I'm affected by the dismal news we hear every day and also by the chance that I could lose my job." Consumers haven't sworn off gift giving, but they are turning back to old standbys. The 1940 orchestral-music video Fantasia, which Disney released on home video last month, has become this season's runaway best seller (price: as low as $15.95). Popular too are Water Babies dolls ($17.99), which feel lifelike when filled with water. Also in vogue are saws and drills for thrifty do-it-yourselfers and flannel sheets for energy-saving households. A $99 composter is the best-selling item in Smith & Hawken's catalog of environmentally friendly wares. And lovers of planet Earth have boosted revenues 25% this year for Raven Maps & Images, a five-year-old Oregon firm that makes detailed glossy wall maps of the U.S. and the world ($15 to $60). To bait the hook, even the toniest retailers have begun to use gimmicks. Saks Fifth Avenue will give $50 off future purchases to customers who charge at least $750 on its credit card between Nov. 15 and Dec. 15. Shoppers who spend $1,500 can get $150 off. Bloomingdale's is offering 10% discounts to customers in Chicago who sign up for its credit card by Dec. 7. Value is the buzz word in today's retail marketing. Expecting a pinchpenny Christmas, the Target discount chain created a Great Gifts line of some 50 items ranging in price from $5 to $50. Among them: a $5 sidewalk chalk set for children, a $15 executive desk set and a $50 5-in. black-and- white TV. Sears is luring holiday shoppers with loss leaders like a 35-piece Christmas light set for 89 cents. "That is strictly to get customers in our store," says Matt Howard, senior vice president for marketing. "We bought a couple million of those." Consumers are searching out items with family appeal. The hottest seller in Williams-Sonoma's holiday catalog is a $20 gingerbread-house mold that customers and their children can use to make gingerbread gifts. At the Whole Earth Access store in Berkeley, co-owner Laura Katz has noticed brisk sales of a relatively large-ticket item: a $199 five-piece, All-Clad cookware set. The reason for its popularity, she speculates, is that it can last a lifetime. Other popular gifts: wheels of Stilton cheese and boxes of shiitake mushrooms. The bargain-hunting mood has deepened the battle lines between different types of stores. "Sears and Penney customers have moved down to Wal-Mart and K mart," says retailing consultant Walter Levy. "So the discounters will do well. But the top stores, like Bergdorf Goodman and Neiman-Marcus, have been having a hard time. Consumers are shopping at sales or looking for off-price merchandise, and nothing is changing that trend." That attitude has sent Christmas shoppers flocking to the Factory Merchants mall in Barstow, Calif., which houses 50 discount outlets ranging from Polo-Ralph Lauren to Book Warehouse. Hot items at the Toys Unlimited store in the mall include video games and Barbie dolls. "Last year people were looking for the best-quality merchandise," says manager Tami Sabblut. "This year they're looking for bargains." At Rawlings Sporting Goods a big winner is clothing that bears major-league logos. Says manager Demsey Sanchez: "It can be ugly, but if it says L.A. Raiders on it, it sells." Corner cutting has been a boon to discount markets like the Pace Membership Warehouse in Marietta, Ga., which charges a $25 annual fee that lets members load up on bargains like 24 rolls of paper towels at pennies over the wholesale price. House brands are popular as well. "I'll buy the store brands rather than Del Monte vegetables or Dixie Crystal sugar," says Mary Inman, president of the Junior League of Atlanta. "My kids ask for Snickers frozen novelty bars, but I buy them store-brand fudge pops." Beer drinkers too are trading down: discount brands like Milwaukee's Best have been winning enthusiastic converts. Even the well-heeled are joining the frugality. At Atlanta's Invisible Fence by Peachtree, homeowners are spending $895 for underground systems and then saving $300 by installing the gear themselves. The systems give mild shocks to dogs with special collars when they try to stray outside the area's bounds. "As things get tighter, more people are doing their own installation," says saleswoman Virginia Gafford. "And that's in really hotsy-totsy neighborhoods, where upper-middle-class homes sell in the $400,000 range." Other Americans are discovering that less can be more this year. Elizabeth Bloom, who manages a Georgia dental office, recently found it hard to fit into her clothes. "So I decided to diet, thinking I could save money two ways," she recalls. "I wouldn't have to buy new clothes, and I'd save on groceries. I call it my Recession Diet." For Bloom and most others in the U.S., it's looking like a slimmed-down Christmas. </body></article> </text>