It’s beginning to look a lot like…the fifties.
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While shoppers turned out in slightly greater numbers than expected on Black Friday and Cyber Monday, they spent less than last year. That’s not a surprise; the National Retail Federation [NRF] predicted more than a month ago that holiday sales would decline for the second year in a row. “We knew [consumers] would be cautious, stick to a budget,” says spokesperson Kathy Grannis.
Whodathunk? For decades the world has been chastising American consumers for being profligate spenders. Yet, seemingly overnight we’ve become “more financially responsible, using cash instead of credit cards,” according to Grannis. (I can’t wait until some of those foreigners start crying that their exports are down and we’re hurting their profits.)
We’re also holding out for deals. Many of us flatly refuse to shop unless there’s a sale or a discount involved. Of course, retailers know this so they’ve been trying every trick in the book (“20% off today only!” “Free shipping!” “Get $25 back on a $100 purchase!”) to get us to spend with them. The problem is, what happens when the economy recovers? There’s concern in some quarters that we’ve been trained to never pay full price again.
“It seems so,” admits Grannis, who says “customers are getting used to expecting” discounted prices. She adds that, in light of the poor economy, NRF “knew the holiday season was going to be very promotional.” However, she predicts that eventually retailers are going to wean us off the discount wagon. “When new merchandise comes out next year, it won’t immediately be marked down.”
My personal prediction: it depends upon how the economy is doing.
The country’s double-digit unemployment rate is complicating gift-giving even for those with jobs. Grannis attributes it to the “moral dilemma” of “what kind of gift to buy for someone who’s lost their job and might not be able to reciprocate?” The answer seems to be: food!
Store-bought edibles are popular this year, but so are the home-made kind. Folks are sending fruit pies, she says. “Instead of spending $20 on a gift for a distant relative, they’re spending $5” to send home-made cookies. (No word on whether we’re seeing a spike in fruit cake sales so far.)
Personally, I hope this trend catches on. I’m all for paring down the gift (and holiday card) lists and simplifying the holidays. Next thing you know we’ll be making our own ornaments and going door-to-door to sing carols. We might even break out Monopoly or Scrabble instead of the video games.
OK. That last one was a stretch. But spending more time on home-based activities instead of dragging ourselves through the mall isn’t a bad goal. The best Christmas present I ever received was the return of something I already owned: a wooden crib and play set for my doll.
In the months before Christmas my mother hid it. (I can’t recall how she explained its disappearance.) I found it under the tree on Christmas morning- totally re-painted in shiny white enamel with light blue trim and pretty decals. It cost next-to-nothing, but I couldn’t have imagined a better gift. It was like getting back an old, lost friend but in new, happier clothes.
Ms. Buckner is a Retirement and Financial Planning Specialist at Franklin Templeton Investments. The views expressed in this article are only those of Ms. Buckner or the individual commentator identified therein, and are not necessarily the views of Franklin Templeton Investments, which has not reviewed, and is not responsible for, the content. “ If you have a question for Gail Buckner and the Your $ Matters column, send them to: firstname.lastname@example.org, along with your name and phone number.
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