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RETAILERS AND CONSUMERS INDICATE REASONS FOR HOLIDAY OPTIMISM IN NATIONAL FINDINGS OF LARGE-SCALE SURVEY EFFORT

 RETAILERS AND CONSUMERS INDICATE REASONS FOR HOLIDAY OPTIMISM
 IN NATIONAL FINDINGS OF LARGE-SCALE SURVEY EFFORT
 NEW YORK, Nov. 26 /PRNewswire/ -- As the holiday season swings into full gear, the prognosis will be relatively more optimistic than crystal ball purveyors of gloom and doom have been predicting, according to two recent surveys.
 Certainly, both retailers and consumers alike are suffering from a strained economy. Yet, in linking the attitudes of more than 1,000 retailers and nearly 3,000 consumers across the country about the holiday outlook, in two separate but related surveys, retailers and consumers alike indicate there are reasons for holiday optimism.
 Though full resiliency is not a near-term reality for retailers and consumers, here are some of the hopeful indicators from the two survey findings:
 -- Retailers nationwide are more confident than last year.
 -- The holiday sales picture appears a bit brighter than a year ago.
 -- Consumers plan to spend more than retailers anticipate.
 And given that future expectations about the economy can affect current spending habits, it is encouraging to see from the findings that:
 -- Retailers are fairly upbeat about the nation's economy for the New Year.
 -- Consumers, compared to their outlook for the economy as a whole, have more positive outlook about their personal finances for 1992.
 These are among the results from an exclusive survey arrangement this fall between the TRADE Retail & Distribution Group of Deloitte & Touche, the Big Six accounting/consulting firm, and DDB Needham Worldwide, the nation's seventh largest advertising agency.
 While the retail TRADE group of Deloitte & Touche conducted its seventh annual "Retail Business Outlook," a survey of retail executives representing general merchandise, apparel, furnishings and other retail categories, through its network of offices throughout the country, DDB Needham surveyed consumers nationally about their holiday shopping habits and intentions. The advertising agency's custom holiday research effort is an extension of its Life Style Study which it has been conducting for 17 years during the first quarter.
 Findings from the two related surveys, "Retail Holiday Outlook -- Two Opinion Polls Linking Retailer and Consumer Attitudes," is a good reflection of what major retail executives around the country and adult women and men heads of households nationwide are really thinking about the holiday season, according to Harvey D. Braun, co-chairman of the retail TRADE group of Deloitte & Touche.
 "Considering the breadth of our retail poll and that of DDB Needham's research sample, these findings are hopeful indicators of what may really occur during the crucial weeks ahead," Braun says.
 According to Keith Reinhard, chairman and chief executive officer of DDB Needham Worldwide, "The results of the two surveys challenge many prevailing attitudes about the economy and the holiday season. Together, DDB Needham and Deloitte & Touche have the data to correct many misconceptions about buying trends and attitudes."
 REASONS FOR OPTIMISM
 More Retailer Confidence.
 Findings from the retail TRADE groups' survey indicate retailers are more confident this holiday season compared to last year. Their outlook stems from applying the prudent, competitive strategies and "survivor" lessons learned last holiday season. Savvy merchants are better prepared to cope with recessionary pressures and increasing rivalry.
 To combat the holiday competitive environment, retailers are sticking to the strategic course taken last year in what appears to be a more intensive plan of action. The top tactics continue to be trimmer inventories, increased promotions, and offering more exclusive merchandise assortments. Also they plan increased advertising and lower prices.
 At the same time, fewer retailers than last season expect consumers to have as tight a grip on their purse strings. Twelve percent of retailers expect consumers to spend more this year, versus only 3 percent who thought so last year. And while 45 percent are still expecting consumers to spend less this year, that level is down sharply from the 73 percent who felt this way in 1990.
 Looking at the bottom line, retailers, on balance, indicate they see a slight improvement than a year ago for their own holiday sales picture. Median sales growth predictions are up 1.2 percent over last year, as compared with only 0.3 percent a year ago. The profit story is similar with median increases projected for 1.1 percent over last year, as compared with predictions then for no profit increases.
 Consumers Plan to Spend More Than Retailers Anticipate.
 Because retailers are more optimistic about consumer spending for this holiday than they were last year at this time, they still may be underestimating consumer buoyance.
 -- While 12 percent of retailers believe consumers will be spending more this year than last, nearly twice as many consumers (21 percent) plan on spending more for holiday gifts this year.
 -- At the other end of spectrum, 45 percent of the retailers contend that consumers will be spending less this year, but only 25 percent of consumers anticipate spending less.
 The average amount people personally anticipate spending is $368. Women, who are usually the principal shoppers in a household, plan to spend $404 vs. $326 that men plan to spend.
 -- More than half (55 percent) anticipate spending $300 or more.
 -- 12ilers surveyed are fairly optimistic about the nation's economy as they head into 1992.
 -- 46 percent say the economy's health will get better in 1992, compared to 5 percent who thought so in last year's survey.
 -- 43 percent of this year's sample believe the economy will remain the same.
 -- Only about 11 percent believe the economy will get worse in 1992, compared to 71 percent who felt it would a year ago.
 Consumers More Positive About Own Finances Than the Economy.
 How consumers view their financial future can have an impact on how they decide to spend their money now.
 The DDB Needham survey findings indicate consumers have a more positive outlook about their personal finances for the national economy. The relative optimism of consumers' personal financial outlook versus their relative pessimism for the economy in general is fairly characteristic of recent recessions.
 -- 29 percent of consumers expect to be better off personally next year than this year, while only 22 percent expect the nation's economy to improve in 1992.
 -- Conversely, only 17 percent think they will be personally worse off in 1992 than this year, while twice as many people (34 percent) think the economy as a whole will be worse in 1992.
 Other Retailer Findings -- Outlook for Industry.
 Retailers' outlook about their holiday sales and profits is more positive than their view about how the retail industry will perform. Half of the respondents believe retail industry sales will be the same, and one-third expect sales to be lower -- which is more optimistic than their views last holiday season.
 In industry profits, 59 percent expect them to be lower, compared to nearly 78 percent who thought so a year ago.
 Hope in the Face of Lingering Recession.
 Last fall, before the recession was officially declared by Washington, most retailers surveyed nationwide by the retail TRADE group of Deloitte & Touche believed the country was already in a downturn. Since then, though a recovery has been technically made official this fall, retailers still maintain there's a slump. Nearly the same percentage of retailers as last year believe the recession continues to linger, or 85 percent.
 The majority of retailers believe economic improvement will get underway in October 1992 through March 1993, or the fall/winter period. And 68 percent of respondents believe the rate of recovery will be slow and nearly 32 percent expect it to be moderate.
 Retailer Concerns for the New Year.
 The state of local economic conditions is the major factor most retailers say will affect their businesses during 1992; this was voiced by 61 percent of the respondents, twice as many as last year.
 The next major factor that will affect retailers' business in 1992 is declining consumer confidence -- a concern among nearly 46 percent of respondents, compared to about one-third of last year's sample who considered it a moderate worry.
 The third and fourth factors cited by 40 percent and 28 percent, respectively are local industry layoff and overall unemployment.
 Factors rated as being of moderate concern are labor costs, (65 percent, which is the same as a year ago) and overall unemployment (60 percent).
 About the Methodologies.
 The "Retail Business Outlook," conducted throughout October by the retail TRADE group of Deloitte & Touche and its 34 participating offices nationwide, represents responses from 1,072 retail executives in major retail segments of the industry.
 The general merchandise, apparel, furnishings and other (GAFO) categories -- the standard industry classifications -- represented in the survey are: department store (4.4 percent); specialty department (12.4 percent); discount department (2.9 percent); mass merchant (2.5 percent); variety (2.2 percent); catalog showroom (1.2 percent); membership warehouse club (0.5 percent); apparel (21.6 percent); home furnishings (12.2 percent), which includes home entertainment/electronics, video stores and major appliance stores; other specialty retailers (13.8 percent); non-GAFO categories (26.7 percent), which includes supermarkets, drug stores/health & beauty aids, combination drug/supermarket, convenience stores, and home improvement retailers; and other non-GAFO specialty outlets.
 The self-administered questionnaire of 20 questions covered the outlook for the national economy and the retail holidays, and marketing trends for the upcoming year.
 The majority of participating companies' annual sales volume (all stores) range from $1 million to $20 million and the overall range is from under $1 million to over $200 million. Store locations are from under 20 to over 500.
 The DDB Needham consumer research, which was conducted throughout October, was completed by 2,945 men and women who are members of the advertising agency's Life Style Study consumer panel.
 This nationally representative sample of adult heads of households completed a custom 32-item, self-administered questionnaire in their own homes. The questionnaire covered consumers' anticipated purchase patterns for the 1991 gift-giving season and their attitudes toward holiday shopping.
 In order to see how consumer attitudes about shopping change during the holidays, several questions on the holiday survey also were asked of these same respondents earlier in the year on the general Life Style Study survey.
 The DDB Needham Life Style Study has been conducted annually by the agency since 1975. During the first quarter, 4,000 men and women nationwide are surveyed by mail and are asked approximately 1,000 questions about their attitudes and opinions on a wide range of topics. The sample is closely balanced to the U.S. Census for adult heads of households.
 About the Firms
 The Trade Retail & Distribution Services Group of Deloitte & Touche is the largest practice exclusively focused to serving the needs of retailers and related industries. Its network of professionals throughout North America provides accounting and auditing, tax, and management consulting services to a broad base of clients. Deloitte & Touche, the nation's third largest professional services firm, serves clients through 16,500 people in offices in more than 100 U.S. cities. The firm is a leading member of DRT international.
 DDB Needham Worldwide is the seventh largest advertising agency in the U.S. More than 1,000 clients are served by the agency in 91 offices around the world.
 -0- 11/26/91
 /CONTACT: Sally Robbins of D&T TRADE, 212-492-2162; or Lou Tripodi of DDB Needham, 212-415-2109/ CO: ST: New York IN: REA SU: ECO


KD-SH -- NY001 -- 7140 11/26/91 08:34 EST
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