Shoppers rein in holiday spending
Posted December 11, 2008 10:59 p.m. EST
Raleigh, N.C. — Shoppers are keeping a tight rein on holiday spending this year.
Fifty-three percent say they expect to spend less on holiday gifts than they did last year, according to an Associated Press-GfK poll released this week. An additional 40 percent say they will spend about the same.
"With the economy and everything, I think everybody was definitely scared,” said Tina Ringer, with Seagrove Pottery.
While business is off this season, it is not as bad as Ringer feared. The biggest difference, she says, is how customers are buying.
"They are not spending as much per item,” Ringer said.
Battered by a recession that started a year ago, retailers expect this holiday season to be one of the worst in a long time. Retail sales dropped by 2.7 percent last month, according to a survey by the Goldman Sachs-International Council of Shopping Centers.
The Associated Press-GfKsurvey found that 7 percent expect to spend more on holiday gifts.
“The Nicole Miller, it is a $400 dress, and we are sold out," said Jenn Johnson, with Wardrobbe.
Miller says customers are still buying expensive items. While sales are down, they are not as dismal as anticipated, she said.
"We are doing really good from what we thought we would be doing,” Johnson said.
Rising unemployment and tight credit are leading people to spend less, further weakening the economy. Cindy Angel says she is cutting her shopping list by 30 percent.
"We are spending a little bit less this year,” Angel said.
Lamp store owner George Viall says it is too soon to tell how the holiday season will end for retailers.
"The jury is still out. I would estimate that it is going to be down some. I think I would be crazy not to estimate that," said Viall, with Thompson-Lynch Company.
Many shoppers say they are using shopping money to pay down bills. The Federal Reserve reported Thursday that household debt levels have dropped for the first time in more than 50 years.