Disturbed by the recent slump in sales, merchants here and nationwide are counting on the Christmas spirit to draw consumers back into the stores.
To make sure that happens, many have launched big promotional campaigns featuring large discounts on a wide array of goods -- even before the official Christmas sales season starts this Friday.
Retailers are predicting sales gains of 8 to 10 percent over last year -- not bad, but significantly less than last year's increases of 15 percent or more. The big increases came on the heels of a slump in 1982. That year, in the midst of the recession, many stores experienced a drop in sales.
The expected increase also is much less than the industry had anticipated earlier in the year, when consumers were spending freely. As a result, retailers fear they may have over-ordered and will be left with too much inventory.
"We're cautiously optimistic," said a spokeswoman for Bradlee's Department Stores.
At Bradlee's, "many categories of goods have begun to show satisfactory results," the spokeswoman said. In October, however, the 130-store chain was "hurt with unseasonably warm weather, which does not favor the sale of cold-weather apparel or cold-weather commodities like blankets and comforters," she added.
"If the weather is good, business will be good -- not fantastic, but better than fair," predicted Mortimer Lebowitz, president of Morton's Department Store.
Other area retailers are less guarded. "We're very encouraged," said J. Warren Harris, chairman of the Hecht Co. "We think business will be excellent, particularly because the calendar is very favorable to us." With Christmas falling on a Tuesday, retailers will have two extra selling days, including a Sunday. "Those will be very big volume days."
"We're optimistic and foresee a good season," a Raleigh Stores Corp. official said.
In private conversations, however, some retailing executives have expressed concern about the upcoming season, citing the surprisingly sluggish sales pace for the last four months.
Financial analysts, looking at the same data, have revised their economic forecasts downward.
"Christmas won't be as good as we had thought it would be several months ago," said Monroe H. Greenstein of Bear, Stearns & Co. Most financial analysts had predicted double-digit sales gains. But Greenstein predicts now that retailers will bring in about 8 percent more money than they did last year.
"It's not a barn-burner," he said.
For consumers, however, retailers' lowered expectations are good news.
"If you're a Christmas buyer, you're going to have a real good time -- because everyone's overstocked and that means a lot of promotions," said James Newton, chief economist of Management Horizons Inc., a market-research and consulting firm that specializes in the retailing industry.
"There will be promotional madness," said Stacy Ruchlamer, a retail analyst for Shearson Lehman/American Express Inc.
"The level of promotion we are seeing right now is unheard-of. There is no way retailers will be able to curtail it, either, because the consumer has grown accustomed to seeing and buying goods at reduced rates," she added. "To stay competitive, retailers will have to continue to reduce prices."
The biggest promotions probably will come in apparel -- especially winter clothing, which has been slow to sell because of unseasonably warm weather. As a result, many department stores have begun canceling orders from apparel manufacturers or are asking for extended payment periods, Ruchlamer noted. What remains will most likely be offered at huge discounts, she said.
Promotions could heat up even more if consumers are slow to start shopping for Christmas, Greenstein added. "If the season picks up late, after the beginning of December, there will be very large mark-downs on seasonal goods and ready-to-wear clothing," he said.
Still, some goods are so popular this Christmas that merchants will not need to cut prices -- even if overall sales remain sluggish. There may even be shortages of some of these items -- traditional toys and electronic goods in particular -- as Christmas approaches, retailers cautioned.
With the decline in popularity of electronic video games, traditional toys such as dolls, action figures such as "GI Joe" and board games are enjoying a resurgence.
Cabbage Patch dolls are still hard to find, which creates more demand for Cabbage Patch accessories, according to Morinda Christopher, director of corporate communications for Toys 'R' Us Inc. Parents who cannot buy the doll their children want are buying Cabbage Patch accessories -- from clothing to stickers -- to keep them happy, she said.
Other dolls, ranging from the new Rainbow Brite, an orange-haired urchin, to the classic bosomy Barbie, also are being snapped up. Retailers said that the more expensive dolls seem to be enjoying the greatest popularity.
Action figures from "Star Wars" and "Master of the Universe," as well as toys that can be transformed from a car or plane into a robot, are also selling fast.
So are board games, thanks to the popularity of Trivial Pursuit, Christopher said. "It has sparked the interest in other games as well, such as Scrabble, Monopoly, Parcheesi -- even chess and checkers. And that has translated into buying more games for children," she said. "It's very much the trend to see adults leaving the store with a couple of board games for themselves, a couple for the pre-schooler and a couple for the 12-year-olds."
Another popular item is the new Fisher-Price camera, designed and made by Eastman Kodak Co. for use by youngsters, according to Scott Goode, president and owner of Lowen's toy store in Bethesda. "The camera is a real working camera, using real film and a real flash."
Like many toy stores across the country, Lowen has done outstanding business over the past few months.
"I don't think the toy industry has enjoyed a year where there are so many extremely popular items," Goode said.
Also enjoying prosperity are stores specializing in electronic equipment. Of these products, videocassette recorders continue to be the biggest seller. "We have sold more VCRs this year than the sum of all we sold in prior years," noted Frederic J. Bell, senior vice president of W. Bell & Co.
One reason is that prices are rapidly declining so that consumers can purchase high-quality VCRs with a variety of extra features for around $400, retailers noted. For 1984, Electronics Industry Association (EIA) predicts about 7.5 million VCRs will be sold -- more than an 80 percent increase over last year's record of 4.1 million VCR units. Although retailers say they have a good supply of VCRs, there may be shortages of some models.
The popularity of VCRs also has boosted the sales of color televisions. "The color-TV receiver is becoming the center of the home-entertainment system," said Allan Schlosser, EIA's director of public affairs. "Consumers are upgrading their technology, investing in the best state-of-the art color TV to go with their VCR, and moving the old color set to the guest room."
As a result, fewer black-and-white televisions are being sold.
Big-screen projection televisions also are popular, retailers said, indicating that they were surprised by the phenomenon. Priced at about $2,000 each, the televisions are quite expensive. "I can't get enough of them," said Richard Birnbaum, vice president of Circuit City. Circuit City also is running into some shortages of the new audio technology -- digital audio-disc players. "The sales are phenomenal," Birnbaum said.
Another popular consumer electronic item continues to be microwave ovens, largely because of reductions in size and price. "They're just flying out the door here," said Jack Luskin, president of Luskin's Inc.
Retailers hope that more than just electronic goods will soon begin flying out the door, ending the recent doldrums in consumer buying. According to figures released last week by the U.S. Commerce Department, sales (excluding automotive goods) have remained essentially flat for the last six months. Some of the sluggishness was expected -- and even welcomed -- by economists after the rapid growth in consumer spending during the first half of the year.
Consumer demand also has declined because of the slower growth in employment and income. What is more, analyst Greenstein said, "with inflation so low, there has been no real pressure to buy goods." Consumers who saved during the recession to buy goods they needed or wanted already have made many of their purchases, contributing even more to the doldrums.
Warm weather also played a part in the lower figures. "Weather is always blamed when sales are poor," said a spokesman for the Greater Washington Board of Trade's retail bureau. "But this year, it has really had an effect. The weather here has been a disaster. People just don't buy winter coats when it's 75 degrees outside."
Now that the cold weather is back and the presidential election, with all its uncertainties, is past, most analysts and retailers expect sales to pick up -- although not as much as they had hoped for earlier this year.
"It's very difficult to conceive of a poor Christmas at a time of prosperity," Greenstein said. "It's the one time during the year that people spend."
Added Robert J. Simonson, an analyst with Kidder, Peabody & Co. Inc., "Christmas is Christmas -- there's just no way to predict."