Shoppers scaling back holiday spending

November 26, 2008 7:34:48 PM PST
Consumers have plenty of reason to watch their spending this holiday season with talk of a recession, layoffs and rising unemployment.

But this is also make-it-or-break-it time for retailers. They are doing everything they can do to nudge consumers.

Seeing Santa is usually a sign that the holiday shopping season has begun. But there are new signs out there that indicate shoppers are in for a far-different experience.

Stores have already marked goods down 50 to 70 percent.

Maile Ogden, who admits the signs are convincing enough for her says, "I think it'll get people in. Whether or not they but, I don't know."

Retailers know consumers have cut back on spending in the past month. They hope the holiday specials will change that.

"I see people out spending money, really. I hear that there's a downturn and I know there's a downturn. I understand it's tough. But, I think we spend too," said Bill Doheney of Brentwood.

This is the second Christmas for specialty shop "Just Dogs." Store owner Laura Lawlor says foot traffic has been strong all week and she considers that a good sign.

"Definitely people are still shopping and spending," she said.

Early discounting will mean smaller profit margins. Analysts say smart retailers are trying to capture sales early on as shoppers trim back spending.

The ads are filled with sales and stores are opening earlier than ever on Black Friday. An outlet mall in Gilroy is even opening up at midnight Friday morning. And, Apple is already promoting an online sale on Friday, something no one can recall happening before.

At Takken's Shoes the key barometer is sales of popular Ugg's boots.

"It doesn't seem to be slowing down any. I'm selling just as much now as I did last year," says store owner Chris Keaveny.

Some wonder if once the weekend frenzy is over, there will be a lull.

"There are less weeks in between Thanksgiving and Christmas this year. So I don't anticipate a lull at all because after Thanksgiving we're right into December and you only have a few weeks left," says Stoneridge Marketing Director Carrie Williams.

This truly is a different kind of holiday shopping season. Macy's already had deep discounting last week. Kohl's wrapped up a three-day sale Wednesday with discounts up to 40 percent.

Surveys indicate some consumers expect to cut back spending by as much as 40 percent.


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