T'was a month before Christmas

and all through the mall

Not a shopper was stirring

Business was slow....

That's the way the Christmas story is beginning this year for the America's merchants.

Although Washington stores were crowded this weekend with shoppers drawn by sunny days,preseason sales and the first taste of turkey, the holiday selling season is off to a slow start.

The evidence can be seen by walking through Montgomery Mall or Mazza Gallerie on a weekday. Or by reading the unseasonably early sale ads that most departmental stores are running to try to boost their sales even if they have to cut prices. Or by trying to get a major retailer to give a detailed on-the-record assessment of the prospects for the Christmas season.

Better you don't ask.

"It's a big question mark," said Robert Vandemark, executive vice president of Garfinckel, Brooks Brothers, Miller & Rhoades.

"Everybody is up in the air about Christmas," agreed Suzanne Holmes, who follows retailing companies for Loeb Rhoades Hornblower & Co.

"We are as nervous as everybody else about the Christmas season," said Andre Lewis, president of Best Products.

Uncertainty is often a code word for bad news among retailers, who fear any prophecy of poor sales will prove to be self-fulfilling. The assessments most retailers make of the month ahead are not negative, just cautious and carefully phrased.

"We think there's going to be an increase over last year," said Garfinckel Corp.'s Vandemark of the Christmas sales of the 209 stores in 37 states owned by the Washington company.

"Sales are going to come a little harder this year than they did last year," added William Striegl, district manager for the J.C. Penney Co. stores in the Washington-Baltimore area.

"We feel positive about the outlook for achieving our planned Christmas sales," said Hecht Co. President Allan Bloostein.

"A record Christmas for the general merchandising industry in both current dollars and unit volume" is predicted by Sears, Roebuck & Co., the nations's biggest retailer and the voice of big chains.

But record sales are easy to come by when inflation is pushing up the price of goods by 10 percent per annum, and chains are rapidly opening new stores. Meeting sales targets and beating last year's figures can be hollow accomplishments if they are done by taking early markdowns and spending extra money on advertising, thus reducing profits.

The big unanswered question is whether this year's record sales will maintain the growth rate that retailing has enjoyed through three record Christmases and a long economic boom sustained largely by consumer spending.

For most big chain stores, the rate of sales increases slowed during the August, September and October quarter, and there is widespread concern that the trend will carry through the critical November, December and January period. Even if sales hold up, however, many merchants fear their 1978 sales and profits will not look good by comparison with last year, which was a block buster of a Christmas.

As David Waters, the chairman of Garfinckel Corp. put it last week in announcing a 24 percent sales gain for the first nine months of the year, "We are anticipating a reasonably good fourth quarter, although the rates of increase will not be as great."

Not only are Christmas sales in question, so is the whole future of the economy. Liberal and conservative economists alike are debating with the Carter administration over whether White House inflation-fighting efforts will drag the nation into a recession next year.

But next month is what merchants are worried about. The Christmas season is when most retailers make their money and do the bulk of their business.

If consumers decide to tighten their belts at such a critical time, it won't matter much whether it is because a recession is starting or because a recession is feared. Already there are signs consumer confidence is fading, although Sears's assessment is that it has "not been of sufficient proportions to suggest a sharp cutoff of spending anytime soon."

Sears, however, raises another potential negative - consumer credit. Between 53 and 54 percent of Sears' December sales are made on charge cards.

The nation's consumers were in hock for $246 billion at the end of September, and that debt - which doesn't include home mortgages - was growing at an annual rate of 16 percent. In the third quarter of this year, consumer borrowings amounted to more than 18 percent of disposable personal income, the Federal Reserve reported.

Consumers do not express "undue discomfort" with their big credit card balances or other debts, Sears noted in its Christmas assessment, adding, however, that "history suggests that the repayment burden is sufficiently heavy to cause reduced rates of credit extension in the next several quarters."

Continental Illinois National Bank - the biggest in Chicago - reported last week that its latest consumer survey showed almost four families in every 10 plan to charge some of their Christmas presents, but the shoppers said fewer purchases will be charged this year than last.

Consumers aren't the only ones with Christmas credit problems; stores borrow, too, financing the inventories needed for the busy season. Unlike credit card finance charges, the interest rates on most of those loans varies, usually tied to the prime rate, which jumped on Friday to 11.5 percent.

To avoid high interest charges and hedge against a slowdown in sales, some retailers reduced their buying and planned for smaller sales gains this season.

Others are raising cash now by running early sales, cutting prices on fall merchandise to try to build volume and to get consumers into a spending mood.

The price cutting is most evident in the clothing business. During the Washington area's frost-free, rain-free fall, coat and boot sales fell below expectations at many local stores.

Hardgoods retailers have not had the early markdown problems of the clothing stores, and it is in this part of their business that retailers talk most confidently.

The Washington area's two biggest catalogue showroom chains, W. Bell & Co., based in Rockville, and Best Products of Richmond, predict good seasons.

Bell's prospects should be improved by the addition of stores at Tysons Corner and in Springfield and by the shift of its old downtown showroom into contemporary quarters at 17th and K Sts NW. New stores recently opened in the Lakeforest Mall also should mean additional Christmas business for Woodward & Lothrop, Hecht's Sears and Penney's.

Woodies has remodeled several floors of its downtown flagship store and has completely modernized its Chevy Chase-store, which suffered both sales and profit problems during a long make-over. Traffic snarls around the intersection of Wisconsin and Western Avenues continue to deter shopping in that area.