The Checkout

I'm Dreaming of a Cheap Christmas

Ylan Mui

Usually, I am all about Christmas. I love Christmas, not least because my birthday is the day before and because I also love cookies. But this year, the holiday season conjures up images of large credit card statements, small bank accounts and an evil Grinch who goes by the alias "Dow Jones Industrial Average."

Apparently, I'm not the only one in this mess. The National Retail Federation, a trade group, today released the gloomy results of its holiday shopping survey: Consumers plan to spend an average of $832.36 on holiday shopping this year, up 1.9 percent from last year and the smallest increase since the survey started in 2002.

The news is particularly bad for family gifts. For the first time since the survey started, people said they would spend less on gifts for relatives, from $469.14 last year to $466.13 this year. And 18- to 24-year-olds said they plan to spend $50 less on gifts overall.

My colleague Anita Huslin spent yesterday talking to consumers about how they are feeling about the economic downturn and found that there's a lot more window shopping, price-comparison and outright deferred retail gratification. Here's what Anita found:

For example, outside the showroom the Regency Furniture store in Largo, signs beckoned to shopper offering "No Credit...No Problem" and "Instant Approval. Everyone Qualifies!" It drew in Gerald Dyiches and his girlfriend, who are in the market for a dining room set and sofa for their apartment. But Dyiches, manager of a local Outback Steakhouse, told the salesman that he was "just looking," and said he planned to go to Sam's Club and BJ's to comparison shop.

William Cook, a retired shipping and receiving manager for Chevrolet, drives budding karate kids to and from a studio next to the Regency Furniture. He's watched the value of his GM stock a -- significant part of his portfolio -- slide nearly 80 percent in the past year and is starting to do mental calculations on who will be getting Christmas presents this year. (Not a simple equation, given the fact that he has two grown children, 14 brothers and sisters and more than 50 nieces and nephews. He's already slowed his spending, and is "not buying clothes or prime ribs or lobster or steaks." Gifts will likely shrink from $50 t $25 this year.

For others, larger purchases such a new cars are on hold. Muriel Logan, an accountant, said she and her husband, who manages a paint store, have decided to forgo getting rid of their 2000 Ford Expedition, even though "I know it's a gas guzzler. I'd like to get something more economical but I don't want to have more debt now. So we travel less and go out less."

At the Pentagon City Costco, workers wearing plastic gloves lure customers like sirens with samples of comte cheese, blue crab dip, mozzarella balls and toothpick-impaled spinach and artichoke sausage bits. But buyers are serious about prices these days and even a retired foreign service officer is looking closely at labels.

"You guys repricing that?" Frank Knight says to one of Costco butchers, pointing out a mislabeled cut of sirloin tips. Costco appeals to guys like him these days. Even though their customers make more than double the $46,000 average U.S. household income, they're coming to here to ease the twinge of spending $5 for a head of Ukranian garlic at the local farmer's market on a Saturday morning.

But the troubles are starting to sink in now, even for those who don't have money in te markets.

At the new National Harbor overlooking the Potomac, streets were mostly empty and the few who browsed the half dozen stores that are open so far were primarily window shopping.

Traci White, a freelance graphic designer from Mississippi, didn't realize how bad things really were until her father told her last week that he lost $100,000 in the markets.

"We have no 401K or stock options, my husband cashed them out for a divorce," she said, walking away from a souvenir shop with a roll of White House toilet paper and a couple of shirts. "My father's investments...that's my inheritance."

By Ylan Mui |  October 16, 2008; 12:23 PM ET Consumer News , Economy Watch , Ylan Mui
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