By  on January 7, 1994

NEW YORK -- For the second year in a row, dreams of double-digit Christmas gains by mass market retailers were dashed by aggressive discounting at department stores as well as new competition from apparel off-pricers.

Drug and discount store buyers are calling Christmas 1993 a good, but not great, season. When the results are finally tallied, estimates are that sales will be up by 6 to 8 percent from Thanksgiving through December.

For Christmas 1992, sales rang up an 8 percent gain.

As they did a year ago, several retailers originally anticipated 10 percent Yule sales gains. Their hopes had been buoyed by a relatively early shopping spurt that erupted before Thanksgiving.

One reason for the lower-than-expected volume was aggressive pricing on cosmetics and fragrances at department stores, as well as an upturn in consumer demand for high-priced items such as computers and appliances.

"It was slow in general for the whole category, including gift sets," said Mary Hoepfner, buyer for Perry Drug Stores in Pontiac, Mich. "People were in the market for big-ticket items."

Indeed, a spurt of consumer optimism sent many shoppers to department stores where they could score good deals on expensive merchandise. Sales of toys, computers and electronics were strong; apparel volume still lagged, according to retailers.

Other mass market sources pointed out that department stores were offering values such as the Estee Lauder collection of five fragrance miniatures for $25.

"I saw fragrances such as White Diamonds at prices retailers swore they'd never go as low as," said one chain drug executive. "Department stores had a good year, but I wonder if they'll be able to pay the rent."

Another reason customers were drawn to department stores, buyers said, was the lack of new scents at the mass level.

"There wasn't anything really new except Vanilla Fields," said one chain drugstore buyer.

In fact, without Coty's Vanilla Fields and prestige scents, the mass market picture would have been really bleak, buyers said.

"Vanilla Fields was the surprise success of the season," said Eugene Applebaum, chairman and chief executive officer of Arbor Drugs, based in Troy, Mich. He termed 1993 a "strong holiday season" for his chain of 143 units.

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