Retailers Report Modest Gains For January --- Post-Christmas Drop Off In Spending Less Severe Than Concerns Expected
The nation's major retailers reported modest sales gains for January, allaying fears that consumers would retrench more than normal after the Christmas spending binge. The merchandisers forecast similar gains for the rest of 1987.</br></br>January is traditionally the slowest, the least profitable and thus the least significant month of the year for retailers. Much of their business is generated by clearance sales of Christmas and winter merchandise.</br></br>Many store chains said the last-minute rush by Christmas shoppers cleared enough space on their store shelves that they didn't need to resort to as deep price cuts as they had in the past two years. Rocky Hill, Conn.-based Ames Department Stores Inc. didn't hold the three-day, 20%-off sale that it did in January 1986, said Ralph Shulansky, chief financial officer. "We were less promotional than last year," he said.</br></br>Some retailers and economists had projected a big spending drop for January because of the evaporation of many of last year's spending stimulants: falling oil prices, dropping interest rates and anticipation of new tax laws, which, among other things, ended the deductibility of sales taxes.</br></br>Industry executives and analysts said yesterday that they expect consumers to retreat from big ticket items, such as cars, but to spur modest sales gains of general merchandise. Kenneth Macke, chairman and chief executive officer of Dayton Hudson Corp., said he expects sales for its stores open more than one year to grow less than 10% monthly through 1987. "We see that 1987 will be a lot like 1986," he said. "We have to adjust to the fact that inflation is less and sales increases will not be as high."