Retailers Struggle as Consumers Spend Less

By David Darman on Thursday, November 13, 2008.

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The holiday shopping season around the country is getting off to a slow start.

Some major chains saw sales fall in October by around 20 percent from the year before.

That trend may be hitting stores in New Hampshire, but several of the state’s independent retailers seem to be holding their own.

New Hampshire Public Radio’s David Darman has more.

Some customers leaving big box retailers in Concord say they’re not going to be spending as much on gifts this year as in the past.

Joyce Joy of Concord says she’s got to watch her budget.

The fuel costs, the electric. We had to get a new roof, because of last winter so those add up.

Larry and Karen Jones from Belmont said they had to cut their spending in half this year.

We both happen to be out of work at the moment. Our school closed. Yes.

A recent survey by the accounting firm Deloitte & Touche in Boston says these consumers well represent the attitudes of many customers in New England.

Tom McCrory is a partner with the firm.

So we saw 6 percent declines in gift giving, 50 percent declines in holiday home furnishings and decorating the home and 35 percent declines in purchasing clothing for yourself and socializing away from home.

Across the nation, those consumer attitudes have translated into weak sales for many retailers.

Abercrombie and Fitch saw sales decrease 20 percent in October compared to the year before.

Sales at the Gap fell 16 percent.

Linens’ and Things declared bankruptcy after a string of weak sales numbers and so did Circuit City.

Many of these slumping retailers have outlets in New Hampshire.

Nancy Kyle heads New Hampshire’s Retail Merchants Association.

She says some of her independent, small and mid size stores are doing well, despite the sluggish economy.

And so far this year a third of my members their sales have been the same or better than last year, which is very encouraging. And when I ask them how they’re planning to staff for the holiday season, 50 percent of them are planning to hire and staff at the same levels as last year….

The weak sales numbers nationwide could well turn into stores offering greater discounts on merchandise in the coming weeks.

That could be a welcome development for New Hampshire customers.

Tom McCrory is with Deloitte and Touche.

In general for gifts, we seem to see that people are going to buy the same number of gifts this year that they bought last year. But the average dollar they’ll spend on this gift will be slightly less than it was last year. So overall, they’ll be spending less this holiday season. That’s what they’re telling us on this survey.

There are certainly some consumers who are not planning to make cuts for the holidays.

Nancy Brazier of New London said outside of Linens’ and Things in Concord that the high costs holding other people back were not having the same effect on her.

It is getting them down but like I said we need to stimulate the economy. So I’m not going to go overboard but I do feel I’m going to be spending as much as I used to.

Concord’s Steeplegate Mall’s owners would probably like to see more customers spending like in years past.

General Growth Properties Inc. of Chicago reports that next month, it may have to file for bankruptcy.

Stores all across the state are hoping for a pickup in sales in November.

Their owners say lower gas and oil prices could help free up cash that many consumers might spend on the holidays.