December 10, 1996 5:30 PM ET
Jury out on holiday PC sales
By Margaret Kane

  Retailers are experiencing a mixed bag when it comes to computer sales this holiday season.

While there has been a definite seasonal uptick in overall retail sales in the United States compared with last year, the computer and consumer electronics categories have not kept pace.

November sales figures for two leading retailers, Best Buy Co. Inc. and Circuit City Stores Inc., dropped 8 percent at both chains for same-store sales. (Same-store sales do not include revenue from stores built since the year-ago period.)

A survey conducted by the International Council on Shopping Centers, in New York, showed that only 4 percent of those queried had bought computer hardware in the past seven days -- the same number as the year before.

Best Buy and Circuit City both blamed poor overall sales on steep promotional price cuts by vendors such as Compaq Computer Corp., which ran four-color inserts in some newspapers last week touting its Presario and Armada lines.

Still, not all the signs have been bad. Some retailers said the price cuts were attracting customers who would not have made such purchases before.

"Generally, we have reacted to all these cuts. Compaqs are doing very well, and [Hewlett-Packard Co.] is doing fine," said Rachelle Friedman, co-CEO of J&R; Computer World in New York. "We're drawing in a whole new element of people who ordinarily wouldn't come in. Now we can take advantage of a new crowd of buyers."

Retailers also pointed out that this year there are five fewer shopping days between Thanksgiving and Christmas than last year.

"With a later Thanksgiving, you compress the Christmas selling season," said Rick Borinstein, vice president of merchandise marketing for Radio Shack, a division of Tandy Corp. "We had a record weekend the Friday and Saturday after Thanksgiving. I would have been very disturbed if we hadn't had that type of weekend after Thanksgiving."

Borinstein said that with Christmas falling in the middle of the week, "we expect the surge right before to be unbelievable."

As for what's hot, Borinstein said computer accessories were moving well at Radio Shack's stores, and Friedman cited CD-ROM drives.

And the ICSC included handheld computers and personal digital assistants in its list of "Hot gifts" for the 1996 season, taken from mall manager surveys.

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