City merchants gave mixed reactions in an assessment last week of their sales performance during the 2000 Christmas season.
Hopeful for strong results in the peak selling period, merchants nonetheless factored into the equation the spate of redundancies and the economic situation compared with the previous year.
Early on, prospects appeared gloomy even with this in mind. Consumers, late in rallying to the advertiser's call to buy, gave the retail sector some uneasy moments.
However, remittances during the period may have contributed to the late surge in activity. Consumers, according to unofficial reports, may have got more cash than the traditional barrels from relatives overseas. In what appears to be a developing trend, remittances are on the rise.
For instance, during the first six months of 2000, remittance transfers of US$394.8 million entered Jamaica, an increase of US$48.4 million over the corresponding period last year. According to the Bank of Jamaica, during the period, remittance companies accounted for US$204.1 million of the private remittances flowing into the island.
A report late last year from the Planning Institute of Jamaica pointed to a 10 per cent jump in cash remittances, while the Economic and Social Survey 1999 noted that "Imports of consumer goods, including "barrels" are now estimated at about one-fifth of total household consumption." Further, to partially "finance imports, remittances sent by Jamaicans living abroad have increased". The survey noted that retail sales provided more than 85.0 per cent of household consumption.
President of the Retailers Association, Wallace Campbell, observed nothing more than mediocre sales activity during December. "There was nothing exceptional about it in terms of sales," he said. "Every year they say there's all this money in circulation but where's the money?" he asked in reference to the Bank of Jamaica's weekly statements issued during the month. An initial tally by the BoJ, for instance, showed that there was J$16.97 billion (US$377 million) in circulation up to December 8.
Mr. Campbell argued that lack of disposable income and daunting vehicular traffic on the roads are among the reasons for disappointing turnover in his sector. "People have become discriminating in what they buy, buying value for money," he said, and might have "cut back on food" to buy other items such as appliances which usually sold well at Christmas time.
Asked whether he had stock that specifically targeted Christmas shoppers still on his hands, Mr. Campbell said, "Some stock not much." Leg hams for instance did not move as readily as the Canadian picnic hams which were all sold out due, he said, to their superior texture.
Michael Ammar Sr. of the popular chain of department stores which bears the family name, said despite earlier fears by merchants that the season would be a dismal one, "It turned out quite good in the end."
Better sales
Ammar's performed close to ten per cent better than in the comparable period in 1999, with clothing bringing in better sales than housewares where there is usually a 'last minute burst' as homemakers rush to decorate their houses for Christmas.
There was some slowing in housewares, but toys, children, ladies and men's wear performed as expected in the chain which includes the Next Generation, two Ammar's stores and two A-Mart stores. The refurbishing and expansion of A-Mart in The Springs apparently paid off.
But "We were expecting a better Christmas," Mr. Ammar said candidly.
The concern at the moment is to boost sales to pay increased rentals which came into effect recently. Ammar's expects to step up its promotions while at the same time continuing to keep prices down.
According to Mr. Ammar, the stores have been offering better prices to customers by sourcing goods from the Far East, where though prices might go up slightly they would not rise to the level of the United States market. Men's socks, for example, previously available for $90 and up can now be had for as low as $29.95 while men's shirts normally run from $800 -$1,000 now fall in the $350-$550 range.
Furniture and appliance giant Courts (Jamaica) is claiming a better than expected sales performance during the Christmas season.
The retailer, which opened its 24th store in 1999 and has outlets right across Jamaica, was early past the post, among its competitors, with the launch of its holiday promotions. That, tied with lowered charges on its hire purchase plans - extended payment terms from 30 to 34 months and reduced interest rates from 20 to 18 per cent - seems to have netted improved sales.
However, Courts is not saying how much. Managing director Hayden Singh preferred to keep the results close to his chest last week, but admitted, "It was a challenging period but in light of the circumstances we didn't do too badly." Details were, he maintained, unavailable until the company had reported to its shareholders.
In its last report, a mix of lower hire purchase sales and heavier discounting on products saw operating profit at Courts slump by more than half to $251 million in the six months ended October 1, in unaudited interim figures.
Sales fell by $200 million to $1.77 billion, while operating profit slumped from $568.5 million to $250.8 million, in the six months to October 1.
Courts said sales at the start of the third quarter, including the peak Christmas period "have been strong, with the $1 down promotion stimulating credit sales."
But the sales in the second quarter reflected the trend seen in the first three months, with sales sluggish.
"The strong growth in cash sales was not sufficient to offset the reduction in credit sales and total net sales for the year to date were $203 million below last year", Mr. Singh said in the company's statement.
