December 24, 2012

Storm of events chills shoppers' desire to spend

'Fiscal cliff' concerns, Sandy's impact in the Northeast and the school shootings dampen spirits.

The Associated Press

ATLANTA - Last-minute shoppers crowded into malls and stores to scoop up discounted clothing and toys during the last weekend before Christmas, but many didn't seem to be in the spending spirit.

click image to enlarge

A last-minute Christmas shopper dashes through the Willowbrook Mall in Wayne, N.J., on Sunday. Shoppers seem to be spending less this holiday season, analysts said.

Chris Pedota/The Record via The Associated Press

This holiday season, Americans have a lot on their minds on top of the now-familiar job worries.

Consumers in the Northeast and Mid-Atlantic, which account for 24 percent of retail sales nationwide, were tripped up by Superstorm Sandy. The storm hit in late October and disrupted businesses and households for several weeks.

Shoppers are also increasingly worried about the approaching "fiscal cliff" deadline -- the possibility that a stalemate between Congress and the White House over the U.S. budget could trigger a series of tax increases and spending cuts starting Jan. 1. Confidence among U.S. consumers dropped to its lowest point in December since July because of growing concerns about the economy, according to a monthly index released Friday.

And the recent Newtown, Conn., school shooting also dampened shoppers' spirits, analysts said.

This confluence of factors has led to a muted approach to holiday shopping -- bad news for retailers, which can make up to 40 percent of annual sales during November and December and were counting on the last weekend before Christmas to make up for lost dollars earlier in the season. The Saturday before Christmas was expected to be the second biggest sales day behind the Friday after Thanksgiving.

"It's so hard to put yourself in the mood," said Linda Fitzgerald, 51, who was with her 17-month-old granddaughter at The Garden State Plaza in Paramus, N.J., on Saturday. She was out Christmas shopping for the first time this year.

The Yonkers, N.Y., nurse planned to spend $1,500 on gifts such as clothes for her boyfriend, down dramatically from $4,000 last year. She'd expected to start shopping last weekend, but simply didn't feel like it, facing a sister's cancer diagnosis and worry about the economy and the Connecticut shooting.

Similarly, Deborah O'Conner, 51, also at Garden State Plaza on Saturday, had intended to finish her holiday shopping early, but Superstorm Sandy put a wrench in her plans. She spent all last month helping her parents and her cousin, whose Long Island, N.Y., homes suffered damage

"I had planned to be out early, but it didn't happen," said the Westwood, N.J., mother of three children, ages 22, 19 and 15. "If it weren't for the storm, I would have been done."

Marshal Cohen, chief research analyst at NPD Inc., a market research firm with a network of analysts at shopping centers around the country, estimates that customer traffic over the weekend was in line with the same time a year ago, but shoppers seem to be spending less.

"There was this absence of joy for the holiday," he said. "There was no Christmas spirit. There have been just too many distractions."

After a strong Black Friday weekend, the four-day weekend that starts on Thanksgiving, when sales rose 2.7 percent, the lull that usually follows has been even more pronounced. Sales fell 4.3 percent for the week ended Dec. 15, according to the latest figures from ShopperTrak, which counts foot traffic and its own proprietary sales numbers from 40,000 retail outlets across the country. On Wednesday, ShopperTrak cut its forecast for holiday spending to 2.5 percent growth from prior expectations of a 3.3 percent rise.

 

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