John Minchillo, Associated Press
NEW YORK — Many Americans appear to be watching the annual holiday spending ritual from the sidelines this year.
Money is still tight for some. Others are fed up with commercialism of the holidays. Still others are waiting for bigger bargains.
And people like Lark-Marie Anton Menchini are more thoughtful about their purchases. The New York public relations executive says in the past she'd buy her children up to eight Christmas gifts each, but this year they're getting three apiece. The leftover money is going toward their college savings.
"We told them Santa is ... being very conscious of how many gifts he puts on his sleigh," Menchini, 36, says.
Used to be, stores counted on Americans to fill their shopping baskets during the holiday season. But this year, some are scaling back — or abstaining completely — from the year-end spending frenzy that's a hallmark of American culture.
There aren't reliable figures on how many people plan to shop during the holidays. But early data points to a shift in holiday spending.
The National Retail Federation estimates that sales during the start to the official start to season — the four-day weekend that began on Thanksgiving Day — dropped 2.9 percent from last year to $57.4 billion. That would mark the first decline in the seven years the trade group has tracked spending.
And during the week afterward — which ended on Sunday — sales fell another 2.9 percent compared with a year ago, according to data tracker ShopperTrak, which did not give dollar amounts. Meanwhile, the number of shoppers in stores plunged nearly 22 percent.
The numbers are sobering for retailers, which depend on making up to 40 percent of their revenue in the last two months of the year. They suggest shifts in the attitudes of U.S. shoppers that could force stores to reshape their strategies:
SHOPPERS WANT DEALS
Stores slashed prices during the recession to get financially-strapped shoppers in stores and to better compete with the cheaper prices of online retailers like Amazon. But shoppers got used to those deals and now won't buy without them. The constant discounting has blunted the "wow" factor of sales during the holidays.
For instance, some retailers were offering discounts of 40 percent or more on the day after Thanksgiving known as Black Friday. But Jennifer Ambrosh, 40 was unimpressed with the "deals" she saw on that day. "There's a lot of hype, but ... the deals aren't that good," Ambrosh, an accountant, says.
Overall, the retail federation expects spending in November and December to rise 3.9 percent to $602.1 billion. But to get that growth, analysts say retailers will need to discount heavily, which eats away profits.
There are signs that profits for the quarter that includes the holiday season are being hurt by the discounting. Wal-Mart and American Eagle Outfitters are among 47 retailers that have slashed their outlooks for either the quarter or the year.
Overall, retailers' earnings growth is expected to be up 2.1 percent, according to research firm Retail Metrics. That would be the worst performance since profit fell 6.7 percent in the second quarter of 2009 when the country was in a recession.
The recession not only taught Americans to expect bargains. It also showed them that they could make do with less. And in the economic recovery, many have maintained that frugality.
So whereas in a better economy, Americans would make both big and small purchases, in this economy they're being more thoughtful and making choices about what to buy.
- How to eat on just $4 a day
- 15 actions families are taking today to make...
- Religious companies can now opt out of paying...
- How to pay off all your student debt with one...
- The 20 best cities to live in for first-time...
- All aboard: How to win the budget battle with...
- A solution to paying that medical bill you...
- How depression threatens financial well-being
- Allow student loan bankruptcies,... 17
- Raising a kid will cost you $245,000... 11
- How to eat on just $4 a day 10
- Food stamp use shows continued... 9
- Religious companies can now opt out of... 8
- Want to increase attraction in your... 7
- Dave Ramsey says: Don't make... 5
- A solution to paying that medical bill... 4