The nation's largest retailers yesterday reported modest sales gains for the Christmas season, with sales averaging about 5 to 6 percent above last year.
A shorter Christmas shopping season and increased consumer debt kept many consumers from going on a full-fledged shopping spree.
Nonetheless, retailers were heartened by the results because sales were close to their initial targets and stores were not forced into the same price-slashing promotions they had last year to get sluggish consumers into their sales.
Consequently, despite the modest sales gains, retailers expect to post much-improved profits.
Sears, Roebuck & Co., the nation's largest retailer, reported a 1.7 percent sales increase -- to $3.73 billion from $3.67 billion -- over last year.
The increase was somewhat better than Sears had anticipated a month ago, thanks to a last-minute buying spree before Christmas and opportunity buying in post-holiday sales.
Meanwhile, second-ranked K mart Corp. posted a 5.7 percent gain, from $3.39 billion to $3.59 billion. Yet the sales gains at K mart stores that have been opened for a year or more -- a key indicator on how well a chain fared -- dropped by 0.3 percent.
Department store companies fared somewhat better than the nationwide chains.
R. H. Macy & Co., for example, said December sales were up 5 percent over last year. May Department Stores Co. -- the parent company of The Hecht Co. -- reported a 4.2 percent gain.
Although official figures were not in yet for the Washington metropolitan area, retailing officials said stores did moderately well here as well, with sales picking up sharply the weekend before and after Christmas.
"The figures are modest but can be viewed as satisfactory," said Monroe H. Greenstein, a financial analyst with Bear, Stearns & Co.
"Retailers place greater emphasis on improved profits this year and they achieved that goal," he added.
The chains that did the best were those that catered to either the affluent or low-income markets, financial analysts noted.
"The middle-income market is shrinking in size," Greenstein said. "It is tapped-out in terms of increased debt and lower savings."
"The more upscale the chain, the better they've been doing because the affluent household had more money to spend," added Stacy Ruchlamer of Shearson Lehman Bros. Inc.
Even so, chains that cater to the budget-minded consumer fared very well, with Wal-Mart Stores Inc. reporting a 32 percent increase and Zayre Corp. reporting a 35.2 percent increase in December sales.
Additionally, sales at J. C. Penney Co. -- which has seen sluggish sales for the past year -- jumped 8 percent in December, largely a result of the chain's decision to scale back somewhat on its 2-year-old campaign to offer more expensive, fashion-oriented goods.
"The company is now offering more moderate price points, appealing to more customers," said Walter F. Loeb of Morgan Stanley & Co. Inc.
Among other chains, the troubled Montgomery Ward & Co. was the only retailer to post lower sales overall, reporting a 0.4 percent slip from last year to $683.6 million.
F. W. Woolworth Co. posted a 7.3 percent gain, while Associated Dry Goods Corp. -- the parent of Lord & Taylor and Caldor -- said sales increased 3.2 percent.
Allied Stores, parent of the local Garfinckel's, reported a 4.7 percent increase; Carter Hawley Hale Stores Inc., which owns Neiman-Marcus, posted a 0.9 percent rise.
Federated Stores, parent of Bloomingdales, posted a 1.1 percent gain over last year.