December 2, 1996 5:50 PM ET

Computer retailers see happy holiday on horizon
By Margaret Kane

  It's as much of a tradition as the Macy's parade.

The day after Thanksgiving, consumers across the country hit the stores, looking for holiday gifts. And as this year's holiday shopping began in earnest over the weekend, computer retailers were hoping that an improved economy--plus the lure of hot PC technology--would provide for a strong fourth quarter.

Worries about a slumping economy and corporate downsizing kept many computer buyers home last year. But they were out over the weekend. Indeed, overall retail sales for the day after Thanksgiving were up 11 percent compared with last year, and the software and entertainment category was up 8.9 percent, according to the International Council on Shopping Centers in New York.

Anecdotal evidence similarly testified to a strong start. Ann Woolman, public relations manager at Sears Merchandise Group in Hoffman Estates, Ill., said the retail giant saw a definite improvement in sales compared with a year ago.

"At Sears we're very optimistic about electronics," Woolman said. "We expect the computer business to be strong even though the industry has gone through a difficult time."

Woolman said bundled offerings were popular and appealed particularly to first-time buyers.

"It has to do right now with the packaging," she said. "So many first-time computer buyers are looking around and getting confused. Sometimes they decide not to buy. When they look at the packages, it seems easier."

Raymond Navarrete, vice president at Tops Appliance City in Edison, N.J., said even customers who have already bought computers are not up to snuff on the latest new technologies.

"Printers and scanners were hot [over the weekend]. People have discovered that you can do color. They absolutely are surprised," he said. "Those people that may have entered the arena early on, that 386 or early 486 is sitting in the closet. Now they jump back in the arena and can't believe the quality and the price."

Navarrete, whose chain sells appliances ranging from dishwashers to stereos, said he expects computers to sell well this year.

"The initial first blush is that it's going to be a good season, and it will definitely be a computer season," he said. "Obviously, we'll sell more clock radios than computers, but compared to other months, computer sales will be significantly greater. We'll sell more computers as gifts than big screens [televisions] as gifts."

Not every one was as optimistic about the holiday season, however.

Many of the retail chains will not release holiday sales figures for several weeks. Moreover, the latest data from consumer electronics stores, computer superstores and office supply stores is not strong, said Matt Sargent, an analyst at Computer Intelligence, in La Jolla, Calif.

"Usually, October is a good indicator of what's going to happen, and this October was not good," Sargent said. Sales for those three channels were flat in October. He said consumers waiting for MMX technology may end up waiting until next year to make their purchases.

Morgan Stewart, a spokesman for the Circuit City chain based in Richmond, Va., said it's just too hard to predict.

"There are doomsayers and there are those who think consumers might pull through for everybody. But you can never predict what consumers will do," Stewart said. "We hope they'll decide to buy electronics."

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