Printed on: November 26, 2013
Americans not willing to spend without deals
NEW YORK (AP) -- This holiday shopping season, Americans may not spend their green unless they see more red.
Despite signs that the economy is improving, big store chains like Walmart and Kohl's don't expect Americans to have much holiday shopping cheer unless they see bold, red signs that offer huge discounts. As a result, shoppers are seeing big sales events earlier and more often than in previous holiday seasons.
Retailers are trying to lure shoppers like Marissa Anwar, who has been doing more bargain hunting compared with last year.
The operations consultant, who lives in Toronto and New York City, said she's cut her shopping budget to $2,800 from last year's $4,000.
"I was a former 'spend-aholic,' " said Anwar, 29. "Now, I want to make sure I have the money before I spend it."
It's a problem that retailers know all too well. Since the recession began in late 2007, stores have had to offer financially strapped Americans ever bigger price cuts just to get them into stores. But those discounts eat away at profits.
So far, Walmart, Target and Kohl's are among more than two dozen major chains that lowered their profit outlooks for either the quarter or the year. A big reason is the expectation that they'll have to offer huge discounts in order to get shoppers to spend.
There are already signs that retailers are aggressively discounting. Walmart, for instance, on Friday started matching or beating the prices that certain competitors like Best Buy are advertising for some toys and electronics for Black Friday. Best Buy also plans to match rivals' prices. And Target is touting its prices in holiday television ads for the first time in at least a decade.