New York After limping through a holiday season expected to be the worst in decades, the nation’s stores made it to Christmas with little to celebrate.
For many merchants, the winter and beyond are likely to get even bleaker, because Americans are too worried about their jobs and the recession to do much shopping.
“We had to take a step back and reorganize our priorities and realize that it’s not all about money and gifts,” said Michelle Leary, 31, a mother of four from Wakefield, Mass. Her husband, an office manager at a construction company, was laid off three weeks ago.
“It made us take a look back and see what was really important to us,” Leary said.
Over the past year, shoppers have drastically changed their spending habits in ways not seen since the 1970s, switching to store brands and discounters like Wal-Mart. During the holiday shopping season, they cut back on their spending, took advantage of big discounts and bought practical gifts.
“Last year, when things were a little bit better, if there was stupid little things you think someone might like, you grab it for them,” said Bruce Guckert, 23, a carpenter from Everett, Mass., who was out shopping on Wednesday. “This year, you get them things they might need, or want more than others.”
One of the big worries for stores is what to do with the mounds of items they still have to sell. If 75 percent off before Dec. 25 didn’t make people splurge, will even bigger deals afterward do the trick? Another problem is that shoppers shunned gift cards this season. That means they are less likely to return to the stores after the holiday.
“The new consumer mantra for this coming year is: If I don’t need it, I won’t buy it,” said C. Britt Beemer, chairman of America’s Research Group. “America is going from a consuming society to a planned-buying society. Everything is focused on saving more money.”
The retail industry could be looking at its biggest contraction in 35 years, according to Burt P. Flickinger, III, managing director of consulting firm Strategic Resource Group. He estimates that 160,000 stores will have closed in 2008 and predicts that an additional 200,000 will shutter next year. In March and April of 2009, Flickinger expects 2,000 to 3,000 malls to shutter.
A number of stores struggled just to make it to Christmas. Circuit City Stores filed for bankruptcy protection last month. It plans to keep operating, but KB Toys, which filed for bankruptcy protection earlier this month, has already begun to liquidate all of its stores and will shut down completely.