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PRICE WATERHOUSE ECONOMIST FORECASTS WEAK CHRISTMAS SEASON FOR SOUTHERN CALIFORNIA RETAILERS, LAGGING THE NATION

 Christmas Outlook: A Lump of Coal in Retailers' Stockings
 LOS ANGELES, Nov. 30 ~PRNewswire~ -- Southern California retailers looking for a "green Christmas" will have to wait another year, as the continuation of California's stagnant economy will prevent any increases in retail spending this year, according to Dr. Ira Kalish, economist with the Management Horizons division of Price Waterhouse.
 For the greater Los Angeles metropolitan area, which includes Los Angeles, Orange and Riverside-San Bernardino counties, Kalish predicts that general merchandise, apparel, furniture and other (GAFO) sales will be 0.4 percent lower than in the Christmas of 1991. While still negative, this figure is an improvement over the 3.8 percent drop in GAFO sales recorded in the region last year.
 In Los Angeles County alone, sales are expected to decline by 2.8 percent, according to Kalish, while in the Riverside and San Bernardino counties, sales should drop 0.6 percent over the previous year. Orange County stores will post an increase of 2.7 percent, the economist predicts.
 "As a whole, the California economy is worse than that of the rest of the country, contributing to the continued decline in Southern California retail sales, while the rest of the nation's retailers should see improvement," said Kalish. "For the Christmas season, we believe a major improvement in consumer spending in the United States is in store, as a post-election jump in consumer confidence, increased consumer cash flow due to lower mortgage interest rates, and the existence of substantial pent-up demand, particularly for apparel, will contribute to a 6.5 percent jump in GAFO sales.
 "In Southern California, however, the extreme weakness of the economy will not allow for an increase in sales. The weakest performance will take place in Los Angeles, where Christmas sales will be down roughly 1 1~2 percent. The strongest sales will be in Orange County, where sales will rise almost 3 percent. The difference lies in the greater dependence of Los Angeles County on declining defense-related industries."
 While department stores are beginning to recover nationally, recession-weary residents of the Los Angeles area remain cautious and relatively frugal, according to Kalish. He predicts that a rebound for the ailing local department story industry will not happen this year, and he does not expect very positive results for mall-based stores in general, including full-priced specialty stores.
 Management Horizons is the nation's leading consulting firm specializing in retailing and consumer goods distribution. Management Horizons is a division of Price Waterhouse, a leading worldwide professional organization of accountants, business and tax advisers and information technology consultants. Through a global network of firms practicing in 450 offices within 110 countries and territories, Price Waterhouse professionals provide advisory services to businesses, individuals, non-profit organizations and government entities. The U.S. firm, with 13,000 professionals in more than 100 offices is part of the worldwide organization.
 MANAGEMENT HORIZONS CHRISTMAS RETAIL OUTLOOK
 LA Metro
 Area Orange County
 GAFO Sales Percent GAFO Sales Percent
 Year~Quarter $ Millions change $ Millions change
 88.1 5,663 8.6 1,222 6.8
 88.2 6,369 7.8 1,408 5.3
 88.3 6,578 10.1 1,481 2.9
 88.4 9,395 10.3 2,118 12.4
 89.1 6,395 12.9 1,396 14.2
 89.2 7,113 11.7 1,484 5.4
 89.3 7,289 10.8 1,533 3.5
 89.4 10,203 8.6 2,069 -2.3
 90.1 6,971 9.0 1,375 -1.5
 90.2 7,801 9.7 1,530 3.1
 90.3 7,550 3.6 1,520 -0.8
 90.4 10,122 -0.8 2,286 10.5
 91.1 6,606 -5.2 1,462 6.3
 91.2 7,512 -3.7 1,753 14.6
 91.3 7,471 -1.0 1,723 13.4
 91.4 9,736 -3.8 2,416 5.7
 92.1 6,600 -0.1 1,573 7.6
 92.2 7,278 -3.1 1,721 -1.8
 92.3 7,252 -2.9 1,634 -5.1
 92.4 9,701 -0.4 2,480 2.7
 93.1 6,576 -0.4 1,611 2.4
 93.2 7,294 0.2 1,765 2.5
 93.3 7,335 1.1 1,684 3.1
 93.4 9,847 1.5 2,542 2.5
 94.1 6,786 3.2 1,679 4.2
 94.2 7,545 3.4 1,839 4.2
 94.3 7,626 4.0 1,765 4.8
 94.4 10,174 3.3 2,629 3.4
 LA Metro Riverside-
 County San Bernardino
 GAFO Sales Percent GAFO Sales Percent
 Year~Quarter $ Millions change $ Millions change
 88.1 3,420 8.3 776 11.8
 88.2 3,878 8.4 823 8.7
 88.3 3,970 11.4 857 15.9
 88.4 5,512 8.9 1,341 12.6
 89.1 3,784 10.6 923 19.0
 89.2 4,231 9.1 1,062 29.1
 89.3 4,387 10.5 1,040 21.5
 89.4 6,127 11.2 1,525 13.7
 90.1 4,200 11.0 1,061 14.9
 90.2 4,684 10.7 1,206 13.5
 90.3 4,518 3.0 1,149 10.4
 90.4 5,901 -3.7 1,471 -3.6
 91.1 3,827 -8.9 1,001 -5.7
 91.2 4,363 -6.9 1,061 -12.0
 91.3 4,270 -5.5 1,123 -2.2
 91.4 5,413 -8.3 1,449 -1.4
 92.1 3,664 -4.3 1,036 3.5
 92.2 4,151 -4.9 1,069 0.7
 92.3 4,150 -2.8 1,115 -0.7
 92.4 5,326 -1.6 1,440 -0.6
 93.1 3,595 -1.9 1,041 0.5
 93.2 4,109 -1.0 1,079 1.0
 93.3 4,202 1.3 1,101 -1.3
 93.4 5,376 1.0 1,466 1.8
 94.1 3,694 2.7 1,075 3.2
 94.2 4,234 3.0 1,119 3.7
 94.3 4,352 3.6 1,147 4.2
 94.4 5,547 3.2 1,519 3.6
 -0- 11~30~92
 ~EDITOR'S NOTE: Quarterly historical and forecast retail sales background for Orange, Los Angeles and Riverside-San Bernardino counties above. Forecasts are based on a Price Waterhouse proprietary econometric model.~
 ~CONTACT: Gregory F. Romano or Dawn M. Murphy of Berkhemer Kline Golin~Harris, 213-623-4200, for Price Waterhouse~


CO: Price Waterhouse; Management Horizons ST: California IN: FIN REA SU:

BP-JL -- LA009 -- 1945 11~30~92 13:03 EST
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Date:Nov 30, 1992
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