Merry (discount) Christmas!

Millions of shirts, socks, coats, toys, and other items destined for eager unwrapping on christmas morning were bought this shopping season at discounts long before the traditional holiday sales began at major department stores.

These goods, many without labels and with minor flaws, were purchased at America's mushrooming discount and cutrate stores. There are close to 7,500 discount stores across the country now, up from about 5,000 five years ago.

But shopping at many of them can be a mixed blessing, both in terms of savings and product quality, according to some of the nation's top consumer advocates.

"Consumers have to go into these discount stores with their eyes wide open," says Stephen Brobeck, executive director of the Consumer Federation of America, which represents 200 consumer groups. Shoppers should ask themselves, he suggests, these kinds of questions: "What is the price compared to what it would cost in a regular department store? What is the brand? Does it only appear to be a name brand item? What is the model year. Are the goods damaged?"

"You should always be wary when something looks too good to be true," adds Karen Borak, a spokeswoman for the New York City Department of Consumer Affairs.

However, neither of these consumer specialists means to imply that the majority of discount stores are willfully trying to deceive or defraud the buying public -- only that it takes an educated consumer to know a bargain when he or she sees it.

On the other hand, there is an unfortunate tendence among some discount stores, Mr. Brobeck maintains, that, having succeeded in capturing a steady clientele, the overall quality of some of the merchandise declines, with some of it becoming downright shoddy.

Yet neither this drawback nor another -- the lack of service that very often amounts to "self-service" -- has kept cut-rate stores from chipping away at regular department store business. Whether or not the discounters are making heavy inroads into the Christmas sales of traditional stores is not yet clear. But the general trend is apparent.

"Clearly there's a movement away from the older department stores over to the discount stores," says Brobeck. "The main reason is price. The prices on most ordinary goods are generally cheaper."

Joseph Ellis, a retailing expert with the brokerage firm of Goldman Saks & Co., says this long-term trend toward more discount shopping picks up considerably whenever consumers are buffeted by tough economic times. "The customer responds better to discount store values when there are big inflationary pressures," he noted.

Jackie Bitout, a spokesman for Sears, Roebuck & Co. -- the nation's largest retailer with a total of 3,100 outlets, including its "catalog stores" -- acknowledged that the upsurge of discount store buying has cut substantially into its business.

Both discount and regular department stores have suffered from the roller-coaster economic situation in the US. Inflation and tightening of credit get the most blame for what one business source calls "a poor year."

According to the latest economic forecast by Goldman Saks & Co., there will be only a 5 percent increase in total general merchandise sales this year compared with a 10.2 percent increase last year.

On the other hand, many discount stores -- especially the bigger, well-managed chains -- have done exceptionally well in 1980. Caldor, Inc., a discount chain which now has 63 outlets in the Northeast, including 17 in New York State, "has made projections for this to be our biggest Christmas ever," says Fred Robson, a company spokesman. As of nov. 22, which marked the first 43 weeks of Caldor's fiscal year, the company's sales had increased a 18.6 percent over the same period in the previous year.

The K Mart Corporation, another discount chain, now has 1,774 stores in the continental US. It, too, is enjoying a sales boom, though not of the magnitude of Caldor's. K Mart spokesmen forecast a 10 to 15 percent growth in sales this year, far better than most department stores.

It should be pointed out that K Mart and Caldor represent what some retailing experts call "the top of the line" in discount stores. There is little to differentiate them from some department stores except the absence of some lines of merchandise (such as some "designer" clothes) and generally smaller sales forces.

Most consumer complaints, consumer specialists say, appear to be lodged against so-called "fly-by-night" discounters, some of which are in business today and literally gone tomorrow -- before faulty merchandise can be returned. Consumer specialists point out that though any store can have a "no returns" policy if it is made clear to customers, federal and some state laws make it illegal to portray damaged goods as completely sound.

Many consumers, of course, remain loyal to their favorite department stores and shun the discounts no matter what the price.

Macy's New York, "the world's largest department store" and one of the 15 stores in the R. H. Macy & Co. chain, has done away with "Macy's bargain basement," its special discount area. "And from a business point of view, it has been beneficial," says Judy Cohn, a spokesperson for Macy's New York. The company stresses quality goods and friendly service. Nevertheless, Macy's business has sagged, too, compared with a number of discount stores.

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