Retailing: Happy Holidays

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Despite Washington's efforts to cool down the economy and curb consumer spending, it is perhaps the safest of all bets that 1968 Christmas sales will set a new record—as they have regularly for the past 14 years. Though the main seasonal shopping rush starts at the end of this week, on the Saturday after Thanksgiving, early crowds have already convinced retailers that consumers will prolong their surprising buying spree through the holidays. "Nobody kills Santa Claus," says President Bruce Gimbel of Manhattan-based Gimbel Bros., "and I don't think that the income surtax can do it either."

Appliance Bargains. Reflecting a common view, the National Retail Merchants Association foresees a 61% gain (to $5.4 billion) this season for department-store sales. Inflation, of course, will account for more than half of that increase. Cost-conscious despite his affluence, the U.S. consumer has reacted with a rush to buy household appliances. Because their prices have climbed only modestly this year, appliances look like bargains. Color-TV manufacturers expect an 11% sales gain, dishwasher makers a 23% increase this year. Responding to that big surge, Westinghouse last week completed an expansion that doubles the capacity for producing dishwashers at its Columbus plant.

Changing fashions have lifted the demand for items like turtlenecks for men, women's pants suits, and everything in accessories from name-dropping scarves to chain belts. Christmas orders jumped by one-third this year at toymaking Mattel Inc. of Los Angeles. President David L. Yunich of Macy's New York points to another barometer of Christmas trade: "Papa is usually the last one to receive a gift, but this year men's business has been exceptional."

Escalation. Though Christmas normally accounts for about 20% of their business, merchants this year are handicapped by the calendar. Because Thanksgiving comes at the latest possible date, there are only 22 normal shopping days between Thanksgiving and Christmas, the fewest that can occur. To telescope hoped-for sales into the available time, many stores have scheduled extra evening shopping hours. In Chicago, Montgomery Ward will break with custom by keeping its downtown store open on Sundays until Christmas.

Promotion, too, is escalating. San Francisco's Emporium has a three-story, ten-lane slide to attract children—and their parents. Retailers also are running into difficulty recruiting enough salesclerks, despite increasing efforts to hire welfare recipients and the hard-core jobless. In many cities, service will be even worse than last year—if possible.

In contrast to the widespread optimism about Christmas sales, most merchants look for a slowdown in the first half of next year. By then, they figure, consumers will begin to feel the drain of the tax surcharge. On top of that, social security taxes will go up by $3 billion a year starting Jan. 1. Many state and local tax rates are also likely to rise in 1969. As a consequence, most retailers seem resigned to a profit squeeze during the first half of the year. Their big hope is for a rebound after that.