Dampened Christmas Spirit Takes a Toll on Holiday Spending

By Anne D'Innocenzio and Mae Anderson

Christmas shoppers thronged malls and pounced on discounts but apparently spent less this year, their spirits dampened by concerns about the economy and the aftermath of shootings and storms.

Talk about more than just the usual job worries to cloud the mood: Confidence among U.S. consumers dipped to its lowest point in December since July amid rising economic worries, according to a monthly index released Friday.

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

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

Shoppers are increasingly worried about the "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

The recent Newtown, Conn., school shooting also dampened shoppers' spirits atop the fall's retail woes after Superstorm Sandy's passage up the East Coast.

The Northeast and Mid-Atlantic, which account for 24 percent of retail sales nationwide, were tripped up by Sandy when the enormous storm clobbered the region in late October, disrupting businesses and households for weeks.

All that spelled glum news for retailers, which can make up to 40 percent of annual sales during November and December. They 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.

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, sales rose just 8.4 percent to $48 billion from Oct. 28 through Saturday, according to a measure by MasterCard Advisors' SpendingPulse. That is below the online sales growth of between 15 to 17 percent seen in the prior 18-month period, according to the data service, which tracks all spending across all forms of payment, including cash.

At the malls, overall promotions were up 2 to 3 percent from last year heading into the pre-Christmas weekend, after being down 5 percent earlier in the season, according to BMO Capital Markets sales rack index, which tracks the depth and breadth of discounts.

Attempting to drum up enthusiasm, retailers have expanded hours and stepped up discounts.

At The Garden State Plaza, teen retailer Aeropostale discounted all clothing and accessories by 60 percent. Charles David, Cachet and AnnTaylor had cut prices by 50 percent of all merchandise. At AnnTaylor, racks of discounted clothes had been marked down by an additional 25 percent. One dress, originally priced at $118, was marked down to $49 but with the additional 25 percent, it cost $21.30.

But the deals at the mall failed to impress Wendy McCloskey, 35, of Lebanon, Ind., who started her holiday shopping Sunday at the Castleton Square Mall in Indianapolis. A snow storm that blustered through the Midwest this week delayed her shopping plans, and a busy schedule with her children also got in the way.

"I was so surprised. I figured they'd have better deals," she said.

And at The Garden State Plaza in Paramus, N.J., Linda Fitzgerald said she didn't feel like shopping this season, facing a sister's cancer diagnosis atop worries about the economy and the Connecticut shooting.

"It's so hard to put yourself in the mood," said Linda Fitzgerald, a 51-year-old nurse from Yonkers who went out weekend shopping with her 17-month-old granddaughter in tow.

Anne D'Innocenzio reported from New York. Tom Murphy in Indianapolis contributed to this report.

Increase your money and finance knowledge from home

Managing your Portfolio

Keeping your portfolio and financial life fit!

View Course »

What is Inflation?

Why do prices go up?

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

With the Christmas just passed by and the national economy walking over knives and the pockets burnt how to make the ends meet? And to meet the expenses we can't borrow money from our kins and kiths as even would be facing the crisis. It's better to go for payday loans. With fast processing and nominal interest, you can meet your financial crunches with ease and pay back when you get paid. Isn't it simple?

December 28 2012 at 2:37 PM Report abuse rate up rate down Reply

Median household income is back down to where is was in the late 60's. It now takes two people to earn that income versus one then. Taxes are going to go up. Inflation is going to head higher. Jobs, due to "Free Trade" passed by Al Gore's tie breaking vote in the US Senate, will continue to spill into other countries -- taking our wealth generating ability with them. Consumer confidence is plunging. Folks, it is not storms or the terrible tragedy in Newtown that is causing the economy to falter. It is incompetent leadership over decades. The way to change it is to attach consequences to our lawmakers failure to protect American jobs and expand our economy. Salary reductions, benefit losses, pension losses (permanent) -- all retroactive and applicable to all past living politicians should be made the law when spending, taxing and regulation result in a declining economy. It is absurd that those responsible for the burdens placed on it that result in its diminishing, bear no responsibility for their actions. Proper motivations would change that, just like it does in children.

December 28 2012 at 10:55 AM Report abuse rate up rate down Reply

The American People Do Not Have Jobs, Thanks To The Politicans. They Passed NAFTA, & Looked The Other Way, While American Jobs Went Off Shore. Thanks For Nothing Boys & Girls. They Sure Knew How To Protect Their Own Jobs & Money However When It Came To Their Fellow Americans They Were The "Let Them Eat Cake" Bunch!!

December 26 2012 at 7:50 PM Report abuse rate up rate down Reply

I know, I know! It's Regan's Fault!!!!

December 26 2012 at 11:32 AM Report abuse rate up rate down Reply

Obama's great economy slumps along

December 25 2012 at 4:14 AM Report abuse rate up rate down Reply

Watch for January's 2013 report for the NJ unemployment 2012 it will mark 4 years of 9% or more.

December 24 2012 at 6:19 PM Report abuse +2 rate up rate down Reply

The job spin wasn't fooling everyone could that be the reason?

December 24 2012 at 6:15 PM Report abuse +2 rate up rate down Reply