Many in retailing are looking forward to a Y2K-rooted boom -- not by selling survival gear before Jan. 1, but by selling hooray-we're-alive-and-well wares afterward.
The so-called ``January effect'' holds that Americans who hoarded cash in anticipation of year 2000 computer problems at banks will spend it when it becomes clear the financial system hasn't crashed.
That kind of spending boom would be a huge windfall for retailers, transforming what is typically the slowest shopping month of the year into a bonanza.
In preparation for any run on cash in the days and weeks before the ball drops in Times Square, the Treasury will print an extra $50 billion for domestic use and $20 billion to handle demand overseas. That is in addition to the $150 billion the Federal Reserve regularly holds in reserve.
``Our feeling is that once that high-powered money goes into circulation, it's not going to go back in the bank, it's going to get spent,'' said Carl Steidtmann, the chief retail economist for PricewaterhouseCoopers. ``Banks don't make it easy to put money back in -- particularly cash. They make it a whole lot harder than taking it out.''
Like any good economic forecast, this prediction has doubters.
Michael Niemira, retail analyst at the Bank of Tokyo-Mitsubishi in New York, said he can't imagine a cash infusion so large it would sway January numbers.
``Get a bad blizzard somewhere and that will matter more,'' he said. ``I'm not sure we have any parallel to this situation that would let us predict.''
Retail industry watchers generally agree that fears about Y2K, when computers could mistake 2000 for 1900, are likely to affect sales in some way, however.
Some predict a near spending freeze starting after Christmas and lasting into the first two weeks of 2000. In that case, important post-holiday sales could drag down fourth-quarter and first-quarter 2000 receipts, turning a potentially record January into a mixed bag.
Another theory has shoppers going on a spending bender before the Y2K apocalypse. This idea predicts a late-December boom and a slow January. At the least, some say, Y2K could cause a spending shift, as some people stock up on food and gear in December and then cut spending back in January, either because they have enough staple supplies or because they've already spent their discretionary money.
Still others predict a post-holiday sales slowdown as those who are worried about Y2K hunker down -- and stay down, even after the sun rises on Jan. 1, afraid to use their credit cards, which could offset any cash spending gains.
``I think people are pretty cautious with their money,'' said Stephanie Shern, global vice chair of retail and consumer products for Ernst& Young. ``They might think that their number will be used or they might get a lot of errors as a result of what they do so they might tend not to buy.''
As it is, shopping patterns have already shifted January sales, which used to be slow as activity focused on late Christmas returns and inventory close-outs. The month has morphed over the past few years into a solid selling month, as value-driven consumers delay purchases until the after-season sales begin and increasing numbers of gift-certificate recipients swell the purchasing ranks with their own, added dollars.
Last January, for the first time, many retailers actually made money, analysts said. Successful retailers planned for a later season, noted analysts at Salomon Smith Barney, controlling fourth-quarter inventories to reduce markdowns, keeping the selling floor fresh and offering plenty of seasonable goods after the holiday season ended.
Even some of those who anticipate a January effect, however, worry that some retailers expecting a replay of last year will fail to fully take advantage of it by keeping inventory too low or marking down too much.
The strong numbers from January 1999 also have some economists downplaying chances for a bang-up January, noting that it will be hard for many retailers to show growth in comparison to last year's strong numbers.
But with the late-buying trend and the record amounts of circulating cash, economist Steidtmann and others still envision a scenario with the first of next year ushering in the best January sales in history.
``We still have more people working than ever before,'' said John Challenger, chief executive of employment consulting firm Challenger, Gray& Christmas. ``They have money on hand and people now know to wait for the discount season. It might be the heaviest shopping season in many years.''
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