RETAILERS ARE EXPECTING STRONG SALES FOR HOLIDAYS

DAVID GHITELMAN

Food retailers are looking forward to a strong Christmas after a generally unspectacular autumn, according to SN's informal survey of operators across the country.

Industry analysts said the retailers optimism about the holiday season appears fully justified. Low unemployment and a trend toward more home entertaining should keep the cash registers ringing at supermarkets, they said.

Connie Topovski, general manager and vice president, Smith Market IGA, Wooster, Ohio, said the week before Thanksgiving was busy, and she was expecting December would get even busier.

"For Christmas," she said, "we put together a letter listing all our services and sent that out to local businesses."

Most of the services are relatively traditional: deli trays, baskets of fresh fruit, flowers. But one brings a modern touch to old-fashioned Christmas goodies.

"We call it our photo cake," explained Topovski. "We can print small photos, say, of a company logo, and put it on cookies and cupcakes."

Topovski added she hopes the holiday season won't be like the autumn now ending. She said her fall sales were soft, weakened by heightened competition. Jonathan Ziegler, a San Francisco-based equity analyst with Deutsche Bank/Alex Brown, New York, said, "It wasn't an exuberant fall. I don't think anybody was particularly happy with their comparable store sales."

Ziegler forecasts a better December. "Consumers are in a good mood," he said. "Most of them are fully employed. And with the millennium coming up, people are going to do a lot more entertaining and celebrating."

Meredith Adler, an equity analyst with Lehman Bros., New York, also said a high employment rate would probably translate into increased supermarket sales.

"People are being good to themselves on low-ticket items," she said. "Also, supermarkets should benefit from the whole trend of not doing everything from scratch."

At D&W Food Centers, Grand Rapids, Mich., Ron Cox, vice president of marketing, also said his market has grown more competitive.

D&W has responded, he said, with increased promotional activity. "We've had one-day sales, two-day sales, weekend sales," he explained. "We have promotional activity throughout the entire week."

Halloween was one of the fall's bright spots. "More and more people are making an event out of it," Cox said. "We're seeing more parties geared to both older and younger groups."

Another factor that helped this year's festival of the eerie build more sales than in the past was an accident of the calendar. Cox said because Halloween fell on Sunday, many stores celebrated it for two days.

He added he is optimistic for Christmas and New Year's because they will fall on weekends as well. "The holidays falling on weekends calls for a big week of sales in between," he said.

Don Van Winkle, president, Van Winkle's IGA, Alamogordo, N.M., said his stores are also facing increased competion.

"We are reasserting ourselves in our best areas -- service and perishables."

During Thanksgiving, his stores promoted traditional holiday fare -- smoked turkey, cranberry sauce, fruit baskets and pecan pie.

For Christmas, he added, "We do a big business in prepared food, and it's all ready."

Phillip Quillin, president of Quillin's, La Crosse, Wis., was one of the rare food retailers to say sales did "quite well" during the autumn. One reason the fall was good for him, however, was that he had a tough summer. One of his stores was undergoing a remodeling while another was nearly inaccessible because of street repairs.

A strong mover during the autumn was the introduction of homemade-style (it's actually cooked in the store) food in the deli section. "It's meat-loaf-and-potatoes-type stuff, nothing fancy," he said. "It's gone over very well."

The food is going over better than the pre-packaged meal the store had been selling because customers are able to choose the size of their servings.

Based on that success, Quillin's decided to try the same thing for Thanksgiving. "We called it 'Create a Feast,"' Quillin said. "Dinner for you in any quantity you want." Along with a large selection of entrees and side dishes, Quillin's is offering its "mile-high cake," a more than one-foot-tall specialty that's "a great attention getter."

For Christmas, the stores will be doing a lot of catering, selling wine at 10% off and a variety of Norwegian Yule favorites, including lutefisk (boiled cod) and lesse, which Quillin (who is quick to point out that he is not of Scandinavian descent) described as a sort of "Norwegian tortilla."