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Beige Book Report: Dallas

November 11, 1970

The data for this report were gathered in a survey of
twenty-four of the larger retail stores in the Eleventh District. The retailers surveyed reported (1) most stores had experienced a downtrend in sales earlier in 1970 but have noticed a pickup in buying and store traffic in the last two months; (2) about half of those surveyed noted that the prices on goods they purchase are still increasing—some at a slightly lower rate; (3) over half of the retailers mentioned that prices on the goods they sell are still rising—but, again, at a somewhat slower pace in recent days; (4) the majority noticed a trend toward stable or rising sales volume in suburban stores, while most central city stores had experienced a downtrend in sales, especially during the past year; (5) there appears to be increasing price awareness on the part of the consumers and many stores noted a shift toward low to medium priced goods; (6) the relationship between discount stores and department stores does not appear to have changed significantly, although the number of discount houses appears to be rising; and (7) over half of the stores expect sales during the upcoming holiday season to be heavier than during the same period in 1969.

Despite sluggish sales recorded earlier in the year, thirteen of the stores reported substantially heavier buying and store traffic during the past two months. Although consumers appear somewhat more cautious in buying, people seem to be responding well to promotional price appeal ads, and buying volume has increased. One store noted that despite some slack in sales earlier in the year, this would be their best year in history. Another retailer noted that last September (1969) was the beginning of a downtrend in sales, but now October (1970) the opposite feeling seems to prevail.

With regard to price changes, the picture is not quite so optimistic. Twelve out of the twenty-four retailers surveyed reported that prices on goods purchased are continuing to rise. Some felt that prices are not accelerating as fast as earlier this year—but, there was still concern over rising prices. However, price rises are more spotty and across-the-board increases are not as widespread. Prices of goods sold also seem to be rising—order to cover cost, since profit margins have already been reduced. One retailer did report that his store was attempting to reduce prices on a few of their most highly competitive lines.

With a general softness in sales during most of 1970, central city stores have fared worse than most suburban outlets. Most of the retailers reported stable or rising sales volume at suburban stores, while downtown stores struggle to hold their own. However, a number of the retailers noted that as sales have increased recently, some downtown stores are improving their sales volume. Only one retailer reported a substantially larger sales volume at their central city store.

A number of the retailers mentioned an "increasing price awareness" on the part of consumers. Consumers are concerned with prices, but also tend to demand quality for the price paid. There has been a recent trend away from the really expensive items—and toward the medium-to-low priced goods. However, consumers seem to relate prices to quality for all price ranges. One store noted that the better buyer of former years has suffered losses in the stock market and is not buying up to normal capacity. Many of those surveyed felt that quality is more important when consumers are being selective. However, the trend seems to be reversing and a few retailers felt consumers would become somewhat less price conscious in future months.

With the recent increase in discount store outlets, many retailers felt that competition has become keener. Although Sunday closing laws have taken some edge away from discount stores, one retailer noted that the increase in "square footage" alone has probably shifted the balance toward the discount outlets. Many of the items offered by moderate and higher priced stores are not available at the discount centers; however, for lower priced items, the forcefulness of large discount operations makes competition quite keen as a number of retailers noted-customers are very aware of price competition at this time.

In comparison with the 1969 holiday season, the majority of retailers reported that they expect a heavier volume of sales this year. Three of the retailers expected a substantially heavier volume, eleven expected a slightly heavier volume, seven expected sales to be about the same as in the 1969 season, while only three felt sales might be slightly lighter this year.

In the way of general comments, one retailer noted that consumer sentiment was low due to the economic situation but expected relief during the fourth quarter and early in 1971. One noted that if the General Motors strike continued, plus the massive layoffs at Texas Instruments, Ling-Temco-Vought, General Dynamics and Ford, that holiday sales could be softer than are now anticipated. One retailer indicated he was taking a "lean bull" position and expected October through April to be very strong for retail sales.