Justine Griffin/Sarasota Herald-Tribune—Economic uncertainty surrounding the government shutdown has been pushing American consumers to take a conservative approach to spending this holiday season.
The National Retail Federation predicts that the average shopper will spend $737.95 on gifts, holiday-themed decor, greeting cards and more this year, down from the $752.24 average shoppers spent in 2012.
The NRF expects holiday sales to increase at a modest 3.9 percent rate in 2013, bringing overall sales to $602.1 billion.
That is a more optimistic prediction than the 2.4 percent increase that ShopperTrak, a foot-traffic analysis firm, predicts sales to rise during November and December.
“Though the foundation for solid holiday season growth exists, Americans are questioning the stability of our economy, our government and their own finances,” said retail federation chief executive Matthew Shay.
“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.”
Even though a deal was reached in Washington on Wednesday, executives in the retail industry remain apprehensive.
“A Band-Aid approach is not the answer. Americans deserve to feel good about spending their hard-earned money on gifts for others, and this holiday season it’s evident some could second-guess their spending,” Shay said.
Mall is quiet
Hannah Donovan, a full-time Sarasota resident, was one of only a handful of shoppers browsing the stores inside Southgate Mall on Tamiami Trail Wednesday afternoon.
She did not make any purchases that day, and does not plan to start her holiday shopping anytime soon.
“I am concerned about the government shutdown, but it doesn’t change how I shop,” Donovan said. “But it does make me want to know if my money is safe and reconsider where I should manage my accounts.”
NRF data show that the shutdown has affected holiday spending plans. About 29 percent of shoppers said the political situation will very likely change their spending plans. About a third of consumers aged 55 to 64 said it affects their budget.
More than half of those surveyed said the overall state of the economy this year affects how much money they will shovel out on gifts.
Nearly 80 percent of shoppers plan to spend less overall and are tightening budgets.
“Although the economy continues to recover slowly, consumers remain cautious about spending and are not ready to splurge,” said ShopperTrak founder Bill Martin.
Jeff Green, retail analyst with Jeff Green Partners, said “retail sales have been mixed since the summer. Back to school was disappointing and Halloween is likely to fall flat, too. That doesn’t bode well for the holiday season.”
Spending on Halloween — the second-largest shopping holiday behind the end-of-the-year period — is expected to reach $6.9 billion, down from nearly $8 billion last year. The Halloween season is often a gauge for analysts for the Christmas season.
While 2012 was plagued with payroll tax increases and a general dip in consumer confidence about their government, Green said the overall mood seems more dismal this year.
“There’s one less weekend to shop this year and five less shopping days between Thanksgiving and Christmas,” he said. “Add that to the way the government has been dragging and you don’t have a good mix.”
That climate has not stopped retailers from preparing for the holiday season, however.
Macy’s announced it will open stores at 8 p.m on Thanksgiving Day this year, the first time the retailer has opened on the holiday. Toys R’ Us opened an express store inside the former Restoration Hardware space in Southgate this month and will occupy the space near Saks Fifth Avenue and Macy’s department store entrances through January.