Merchants Take Stock

Expecting a post-holiday reaction from the Christmas buying spree, U.S. retailers found to their surprise that the spree is still going on. In the first week of January, department-store sales were 26% above 1941; in the second week, a fabulous 32%. Less than half this rise can be attributed to higher prices. At their regular January white sales, department store counters were jammed with hoarders, laying in supplies of everything from cotton sheets to wool socks.

To retailers, this was a mixed blessing. It forced them to reappraise their own inventory policies, do a little panic buying themselves. In Manhattan one day last week arrived 1,088 out-of-town buyers, largest number ever to register in a single day. Many had gone just to look around; they stayed to place even bigger orders than last year--not only for spring goods but also for winter replacements. Biggest orders: men's suits, women's dresses, rubber goods (including girdles & corsets), stockings, blankets, sheets. Biggest buyers: those from defense areas.

Same week, members of the National Retail Dry Goods Assn. gathered in Manhattan for their 31st annual meeting, 6,000 strong, to discuss wartime retail problems. They knew their record 1941 prosperity was not likely to last out 1942. They had been on a sort of spree themselves, selling the fat off a nation long pouchy with surpluses. Their 1942 problems: 1) to find enough goods to sell; 2) not to be caught overstocked by a reaction when hoarders go home sated, or when other consumers are kept home by higher prices and taxes.

The merchant is therefore faced with his old dilemma of low inventories v. forward buying. Most N.R.D.G.A. men last week solved it strictly along class lines. Families with incomes under $3,000, they knew, buy two-thirds of all merchandise sold; these families have escaped heavy taxation so far, and are not yet stocked up to the new level of their war incomes.

Thus department stores have been upping their inventories 25 to 35% over last year while swanky specialty shops are keeping their stocks down. The latter's customers are already saving up for March 15.

Shortages. The merchants recognized shortages of merchandise as a challenge to their ingenuity. When they asked themselves what merchandise is affected by priorities, they found the answer to be "everything." Example: lumber is not short, but solvents, oil and pigments used in paints and lacquers are. So even furniture output will be hit. The 1942 scarcity timetable in soft goods:

NO IMMEDIATE SCARCITY Cottons Shoes Novelty Jewelry Paper Products & Specialties

GETTING SCARCE Woolens Nylon Stockings Rugs, Carpets & Linoleum Upholstery Fabrics Rayons

IRREPLACEABLE Silk Most Rubber Goods

Styles and models of clothing will be standardized, colors restricted (only four shades of women's stockings will be offered this season). The merchants will need ingenuity not only to find substitutes, but to advertise them right. First move: the word "substitutes" will be eschewed in favor of "new products." Some of these--such as rubberless golf balls--will indeed be new.

Other N.R.D.G.A. worries:

> How to force customers to carry home small packages, thus saving truck deliveries and,extra wrapping.

> Possible air-raid panics in crowded stores. (Most stores are fully equipped with raid equipment.)

> Loss of Saturday night sales if rural customers cannot come to town in the family jalopy. That may mean renaissance for the crossroads general store.

Cheerful notes:

> The automobile, for two decades the No. 1 competitor of department stores for the consumer's dollar, is out of the running.

> Returned merchandise (often 20% of all sales) is one nuisance merchants may eliminate by mutual agreement under the duress of rising overhead.

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