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 fast 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, a 51-year-old nurse from Yonkers 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.
She planned to spend $1,500 on gifts such as clothes for her boyfriend, down dramatically from $4,000 last year. She had 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, from Westwood, N.J., also at Garden State Plaza on Saturday, had intentions of finishing her holiday shopping early, but Superstorm Sandy put a wrench in her plans. She spent all last month helping out 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 O’Conner, the 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 down to 2.5 percent growth to $257.7 billion, from prior expectations of a 3.3 percent rise.
Online, a last minute surge helped boost sales, which had been tracking well below the projected 17 percent growth rate for the holiday season, according to comScore, an online research company. Online sales from Nov. 1 through Friday rose 16 percent to $38.69 billion. The surge was fueled by a free shipping day event that was held on Dec. 17, according to comScore.