Visits to U.S. Retailers Falls 24% on Final Weekend Before Christmas
Bloomberg reports that consumer spending fell 24% last weekend - the final shopping weekend before Christmas - compared with a year earlier.
The sales drop was not as steep as the plunge in visits. Sales fell 5.3% when compared to the year before.
U.S. consumers were working with smaller budgets for holiday gifts this year because of rising unemployment and declining home values. Macy's Inc. and Saks Inc. offered discounts of as much as 70 percent to lure shoppers seeking bargains, and retailers' profit margins may suffer as a result.
"We had that deep drop-off in consumer spending, which propelled the retailers to go into these very competitive pricing wars," said Marshal Cohen, chief industry analyst with Port Washington, New York-based NPD Group Inc.
"It has a lot to do with the fact that you can get almost anything, anywhere, at any price." Customers have come to expect discounts, he said yesterday in an interview with Bloomberg Television.
Consumers had not been expected to shop or buy as much as they have in previous years because of the recession and concerns about jobs but 25% less shoppers is a pretty steep drop. Bloomberg says a research firm named ShopperTrak is blaming the economy, inclement weather and a calendar shift for the drop.
