Retailers: Christmas spending to be modest

Retailers: Christmas spending to be modest

After a year of furloughs, a government shutdown and a last-minute fight over the debt ceiling, consumer confidence is a bit shaky. As for retailers, they aren’t sure what to expect of the 2013 holiday season.

The National Retail Federation, a trade association of retailers, says the average holiday shopper will spend about 2 percent less on gifts, decor and other seasonal purchases this year. That prediction follows on the heels of a two-point decrease in the Neilsen Company’s Consumer Confidence Index, as well. Consumers are still concerned about the short-term prospects of jobs and earnings, the Neilsen report says.

Rikki Webb, of Hampton, says she has been out of a job for two months, and although she has always been conservative about spending during the Christmas season, this year the amount spent will drop further.

“We only buy for our (three) kids, nephews and my husband’s parents,” she said. Our limit previously has been $150 per child (for our kids) and $10 or less on the rest, and my husband and I seldom buy for each other. This year the limit per-child will drop. I don’t know how much, yet.”

Nationwide, the average shopper is expected to spend $737.95 on gifts, decor, greeting cards and other holiday purchases, 2 percent less than the $752.24 they actually spent last year, according to the NRF survey.

Overall, spending will increase by 3.9 percent to $602 billion, the survey predicts. In 2012, actual holiday spending increased by 3 percent, according to the retail federation.

“Though the foundation for solid holiday season growth exists, Americans are questioning the stability of our economy, our government and their own finances,” Matthew Shay, president of the National Retail Federation, said in a press release. “We expect consumers to set a modest budget for gifts and other holiday-related purchases as they wait and see what will become of the U.S. economy in the coming months.”

More than half of those who responded to the survey said that the economy would impact their spending.

As for Hampton Roads, the fact that federal employees are back to work is positive, but it’s unclear how local shoppers will manage the holiday season after a year of uncertainty.

Generally, Hampton Roads tracks along with nationwide numbers, said Ray Mattes, CEO of the Norfolk-based Retail Alliance group. However, 42 percent of the local economy depends on defense spending, and that means questions are still lingering about upcoming cuts.

“I think, yes, the shutdown ended in time for the holiday season,” Mattes said. “I think we can be optimistic. But there are still concerns for the future.”

Most of the cutbacks in individual shopping budgets will come in the “self-gifting” category, or those purchases shoppers make for themselves when they spot a good deal, the retail federation survey says.

Consistent with results from past surveys, about 40 percent of shoppers will start their buying before Halloween, and the average person will do about 40 percent of their shopping online.

Even with the mixed predictions, local retailers are cautiously optimistic.

“With all of the stuff going on with the government, it’s really hard to predict (the outcome of the holiday season),” says Brian Gaulding, owner of Shawel’s TV Appliance Co. in Newport News.

Still, Gaulding has heightened his Christmas season strategy in the past several years, offering heavy discounts on televisions around Black Friday, and said he plans to up his game this season.

“I’m hoping to double last year on TVs. I’m preparing to double it,” he said.

“We’re able to offer some good appliance specials this year, too,” Gaulding said. “The manufacturers are putting in more offers this year, and there are some deals to be had.”

Betty Lewis, owner of Boutique She-She in downtown Hampton, is also planning new ways to reach potential customers, like appearing in television segments.”

“Without a doubt the economy has been soft this year, and sales have been down,” she said.

“I sure hope it’s a good (holiday) season,” Lewis said. “I’m pulling out the stops to attract attention and generate business for my store. That said, all I can do is pray that it will be better than last year.”

Paitsel can be reached by phone at 757-247-4737.

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