'Cliff' worries, other bad news slow spending

2012-12-25T00:00:00Z 'Cliff' worries, other bad news slow spendingThe Associated Press The Associated Press
December 25, 2012 12:00 am  • 

ATLANTA - 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 tax increases and spending cuts starting Jan. 1

The recent Newtown, Conn., school shooting also dampened shoppers' spirits, adding to 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 storm clobbered the region in late October, disrupting businesses and households for weeks.

All that spelled glum news for retailers, who 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 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 to 2.5 percent growth to $257.7 billion, from prior expectations of a 3.3 percent rise.

Online, sales rose 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 percent and 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.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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