US Retailers Doing What They Can To Lure Shoppers Inside the Door

PROMOTIONS. Discount prices. Special one- and two-day sales. More bilingual employees. New store openings. United States retail chains are fighting back against a drop in consumer confidence, higher interest rates, and shrinking levels of discretionary spending.

``We're stressing toys now, kicking off a national promotion that we call `Toy Mania,' '' says Steve Pagnani, spokesman for Troy, Mich.-based K mart Corporation. K mart is the second-largest retailer in the country behind Wal-Mart Stores Inc., the Bentonville, Ark., superstore.

Other chains are opening new stores or renovating old ones. Bradlees, a Braintree, Mass., retailer, will open a six-floor, 400-employee store in Manhattan's Union Square on Sunday. It's the chain's first outlet in New York. The 143,000-square-foot store follows on the heels of four Bradlees stores opened in suburban New Jersey in October. The retailer will unveil five stores this weekend in Massachusetts, Rhode Island, and on Long Island. ``We believe the way to profit is to grow,'' says company spokesman Coleman Nee.

Different retailers are taking different approaches to getting shoppers past the threshold and opening wide their wallets:

* Carson Pirie Scott, a Milwaukee-based retailer, is going the renovation route with several of its stores.

* Mervyns', a Dayton Hudson specialty store, is introducing maternity clothes and petite and large sizes into its outlets.

* Lord & Taylor, an upscale national apparel retailer, occasionally advertises discounts on special shopping days.

* Sears, Roebuck and Co., the nation's third-largest retailer, is launching a campaign to target Asian-American shoppers, retail analysts say. Sears already has a similar campaign to win more Hispanic-American shoppers.

``Retailers are working very hard to attract customers,'' says Janet Mangano, a retail specialist with Burnham Securities Inc., a New York investment firm. ``There are just a lot of questions now about how well retailers will do this year.''

``Retail sales are being hurt by ... a redirection of consumer priorities and spending,'' as well as higher interest rates, says Kurt Barnard, president of Barnard's Retail Consulting Group in Berkeley Heights, N.J. ``Families just have so many built-in expenses these days that they have few discretionary dollars left in their pockets for purchases.''

Part of the problem for retailers, Mr. Barnard adds, is that Americans need to buy new cars to replace their old ones. ``One quarter of the entire rolling stock of cars and trucks in the United States is 10 years old or older and in need of replacement,'' he says. Big-ticket car purchases mean less money for general retailers.

Sales gains for US retailers this year will be around 4 percent, unadjusted for inflation, Barnard says. But with inflation running between 2 and 3 percent, real sales gains will be 2 percent or less. Retailers have got to step up efforts to reduce costs and at the same time do everything they can to attract more shoppers, he says.

BUT there are major challenges. Consumer confidence, as measured by the Conference Board, a New York business group, fell for the fourth consecutive month in October. The decline is based in part on Americans' concerns about unemployment.

In September, retail sales rose about 6 percent, the US Commerce Department reports. But the strong showing resulted largely from the demand for new cars, building materials, and home furnishings. Apparel store receipts, which had been expected to go up because of back-to-school shopping, fell 1.5 percent.

The unseasonably warm weather around much of the US in late summer and early fall also explains the apparel sales slowdown, according to Prudential Securities Inc. in New York.

October results, not yet tallied up for most chains, look better, Prudential reports. The economic expansion, along with moderate inflation, should bode well for future retail sales, the company predicts.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.