- The Washington Times - Monday, March 24, 2003

ASSOCIATED PRESS
With the nation's malls under tighter security since the U.S.-led war against Iraq began, shoppers still headed to stores over the weekend, but some merchants reported that spending was even more sluggish than usual.
Stores, already bruised this spring by stormy weather and consumer worries about the prospect of war, were bracing for slow sales over the weekend as many shoppers stayed at home to watch televised coverage of developments in Iraq. What remains to be seen is to what degree shoppers will be glued to their TV sets, or how much they will use shopping as a diversion from 24-hour war coverage.
"It kind of gives you a sense of normalcy, doing something you would do on a normal weekend anyway," said Jim Klein, 40, a high-tech project manager from Columbus, Ohio. He was shopping at a Saks Fifth Avenue outlet at the local Polaris Fashion Place.
His wife, Hope Klein, 36, said, "[Shopping is] a little bit of relief, a little bit of escapism."
Shoppers filled the Gallery center in Philadelphia on Saturday, but many walking the corridors didn't have shopping bags.
"I'd rather be at home watching the war," said Brian Maieli, 25, a sports medicine student at Temple University.
The graduate student said that because the economy is down and he doesn't have much money, he didn't have the cash to buy anything.
These past few months haven't brought much cheer for the nation's retailers, who have suffered disappointing sales. Analysts expected March sales to remain slow given the weak economy and shaky consumer confidence, but analysts are worried that the war could prolong such a trend.
Kazuto Uchida, chief economist at the Bank of Tokyo-Mitsubishi Index, which tracks same-store sales for about 80 retailers, now believes there is "a possibility" that March same-store sales will be down 1 percent from a year ago, worse than the unchanged growth it estimated earlier.
Same-store sales are those at stores open at least a year, and are considered the best indicator of a retailer's health.
Mr. Uchida estimated that same-store sales will drop by 1 percent for the seven days ended Saturday from the previous week because of what he describes as the "CNN effect."
Several of the nation's largest retailers will report their weekly sales today.
Spokesmen at Sears, Roebuck and Co. and J.C. Penney Co. Inc. said Friday they saw sales start to slow last week.
Wal-Mart spokesman Tom Williams said yesterday that same-store sales through last week and the weekend were normal. Karen MacDonald, a spokeswoman at Taubman Centers, which operates or owns 30 malls in 13 states, said that it was "business as usual."
Analysts anticipate that as with the 1991 Gulf war, discounters will fare better than department stores, with consumers stocking up on food and emergency items. Analysts also expect sales of big-ticket items such as cars will suffer.
According to a Roper ASW survey of 1,000 people a few weeks ago, six in 10 said the war would have some negative impact on their spending. Women were particularly pessimistic.
Unlike just after the September 11 terrorist attacks, consumers have been expecting war for several weeks, so the event as long as it is quick and the United States is successful as many anticipate should have less-severe effects, analysts said.
But as Ed Keller, chief executive of Roper ASW, a New York consumer research firm, said: "The war is just one more piece of external events that's making people more nervous. People are nervous about their jobs; they're distrustful of business."
Analysts expect that a quick and successful war with Iraq probably would trigger a temporary bounce in consumer spending as happened after the 1991 Gulf war, but the question is how long can it last given the overall shakiness of the economy.
Carl Steidtmann, chief economist with Deloitte Research, believes that barring any terrorist attack here or abroad, a quick conclusion should reduce the uncertainty that has made business more challenging. Such clarity could make consumers more confident and increase their spending.
Consumer worries were apparent at the malls this weekend, while retailers carefully monitored business.
Phil MacDonald, 41, of Cordova, Md., said the economy and the weather have had a significant effect on his timber-cutting business. Consequently he has had to hold off on buying a pickup truck.
"There's nothing you can do. … You've just got to bite the bullet and try to hang in there," said Mr. MacDonald, who was at the Dover Mall in Dover, Del.
Larry Arce, owner of the Silver Cart jewelry kiosk at the Maine Mall in Portland, Maine, said it is hard to tell how sales have been affected so far by the war.
He said the mall appeared more crowded Saturday than it had in weeks. But he thinks most people were there to get out of the house, not to buy.
"If you look," he said, gesturing at the steady stream of shoppers passing by, "there aren't many shopping bags in people's hands."

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