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Similarity in sales.

Retail Merchants See Slight Increase In Purchases During 1991

Arkansas' retailers may be experiencing a sense of financial deja vu by the time the 1991 sales figures come in.

The recently released national figures showed retail sales rose a slight 0.3 percent in November. According to the U.S. Department of Commerce, the nation's retailers made $153.1 billion in sales during November, up from $152.7 billion in October.

The November 1990 retail figures mirrored 1991, with $152.7 billion in sales.

According to financial analysts, the small gain in November reflected the American buyer's hesitancy to spend because of unemployment fears and a general concern about the economy.

"The economic situation was pretty bad at the beginning of the year," says David Dees, manager of University Mall in Little Rock.

Dees attributes that to the Persian Gulf war, which created an enormous drain on Arkansas' economy as well as its population.

"Right after the Gulf war, we found the |consumer~ confidence level at a slight increase," Dees says.

Although the war ended in March, Dees says it was not until August that he began to see a comeback among retailers.

"As August kicked off and then through November, we found we were going to be above last year's volume," he says.

With money in short supply, Arkansas' shoppers became less adventurous and more conscientious.

"I think people like receiving all the information that they can regarding the economic issues," Dees says. "The more information provided the consumers, the better chance the consumers have of making sound decisions."

Nineteen ninety-one could be categorized as the year that Wal-Mart Stores Inc., the Bentonville-based retail chain, made its move beyond the U.S. border.

A joint venture between Wal-Mart and a Mexican retailer, Cifra S.A., was announced July 9, immediately spawning heavy trading of both partners' stock.

Club Aurerra, the Mexican version of Sam's Club, was scheduled to debut with two outlets in December at Mexico City, with plans for two more to be constructed by the end of the year.

Wal-Mart did not limit its expansion to the international market. The purchase of the Bentonville-based grocery chain, the Phillips Co., consummated in December. It was part of Wal-Mart's overall plan to expand its Super Center concept.

"We have superior merchandisers with the Wal-Mart concept," says company spokesman Don Schinkle, explaining the chain's move into the retail grocery market. "We've recruited new people from food chains around the country and now, with the Phillips experience, we have a much deeper bench."

Although only one Super Center store is in operation in Arkansas (Batesville), the chain is building additional outlets in Bentonville and Springdale and plans to add stores in Morrilton, Conway, Monticello and Searcy.

Who's The Boss?

Schinkle traces the rise of Wal-Mart to the top of the retail market to the company's comprehension of shopper needs.

"You have to understand the American consumer," he says. "Our boss is not |Chairman Sam~ Walton or |Chief Operating Officer Donald~ Soderquist. It's the customer that's the boss and if you can't accept that, then you're not going to do well."

So what's the difference between Wal-Mart and its closest competitor, Kmart Corp.?

"Three hundred and sixty-five thousand Wal-Mart associates that are dedicated to their company," states Schinkle.

There are 77 Wal-Mart stores in Arkansas alone, as well as four Sam's Clubs and six distribution centers, employing a total of 22,356.

"We feel like as far as we've come, complacency is a word you will not find in the Wal-Mart dictionary," Schinkle says emphatically. "What we did yesterday is history ... What we do for the customers today is what will keep us the No. 1 retailer."

"Retailers as a whole are basically doing what they do best and they're doing it more now than they did in the past," Dees says. "That's providing customers with the service and the kind of merchandise they're looking for."

But hard work and bargain prices are not enough to bring shoppers into Arkansas' malls. McCain Mall Manager Chris Tilley realizes this.

Simon Management Co., which owns McCain as well as University Mall, is becoming more entertainment-oriented, according to Tilley.

One example is the recently installed carousel, which has become a permanent fixture at McCain; another is the Cinema I and II movie theater, reopened for the Christmas season.

"What we have focused on as a company is that shopping has become almost a form of entertainment," Tilley says. "They might not spend as much money, but we want them to spend more time in the mall. If we can get them more comfortable in the mall, we feel like when they do spend money, they'll do it in the mall."

Tilley expects to see an important increase in sales at his mall once figures are compiled after the holiday season, roughly from Nov. 1 to Dec. 25, with merchants doing 30 to 35 percent of their business during that period.

"I think that we are going to see a substantial sales increase from last year, probably a double-digit increase, even though we lost a week due to Thanksgiving being a week later in the year," Tilley says.

"On the year as a whole, we are going to probably be looking at around a 5 percent increase |in sales~. January and February had decreases |from 1990~, but we had monthly increases after that."

October's unexpected cold snap made a difference for the state's clothing merchants, says Tilley. He sold a large amount of coats, sweaters and other cold-weather gear that doesn't usually sell well until late December.

"And they were able to up their inventory again," Tilley says. "Any time we get cold weather early in this part of the country, it's very good for the retailers."

Merl Haubein, president of the Arkansas Grocers & Retail Merchants Association, a trade organization with statewide membership, expects to see a slight improvement over 1990 once 1991 sales are in.

"I've talked to some merchants that say their sales are up and doing better and some that are doing about even," says Haubein, who judges sales percentages through sales tax increases and decreases. "I'm going to say it's probably going to be similar to '90 with a small increase."
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Title Annotation:1991: The Year in Review; slump in the retail industry
Author:Taylor, Tim
Publication:Arkansas Business
Article Type:Industry Overview
Date:Jan 6, 1992
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