Tuesday, January 16, 2001
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Posted on: Tuesday, January 16, 2001

Retailers face grim forecast for early 2001

Associated Press

NEW YORK — Coming off of what many believe was the worst holiday shopping season in at least six years, retailers are expecting their sales slump to continue for the first six months before picking up in the second half of the year.

The mood was subdued at the National Retail Federation’s annual convention in New York, but merchants tried to put on a happy face, saying the Federal Reserve’s interest rate cuts eventually would spark consumer spending.

"We started last year on an incredible high. We ended the year on a low ... with the stock market on a roller-coaster ride and with the Internet just another way of doing business," said Tracy Mullin, president and chief executive officer of the Washington-based retail organization.

"This is going to herald a whole new set of challenges," Mullin said yesterday.

The retail federation attempted to downplay the grim holiday news, revealing that total sales for general merchandise, apparel, home furnishings and furniture increased 5.3 percent over the year-ago period, to $195 billion. That’s slightly less than the predicted a 6 percent increase.

In 1999, holiday sales, fueled by a booming economy, rose 7.3 percent over the previous year.

Analysts measure retailers’ strength by sales at stores open at least a year, or same-store sales. For the November and December period, same-store sales rose about 2 percent, according to Kurt Barnard, president of Barnard’s Retail Trend Report, based in Upper Monclair, N.J.

Some major retailers say they’re devoting more resources to hiring decisions. Both John Eyler, president and CEO of Toys R Us, and Gordon Segal, CEO at Crate & Barrel, agree that hiring the good in-store clerks has become even more critical in 2001, when sales will not be as easy.

Mullin of the National Retail Federation said retailers need to take chances on new products to differentiate themselves from competitors.

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