Despite booming Black Friday, holiday shoppers remain cautious

The holiday shopping season got off to a fast start this year with Black Friday sales outpacing 2007, but as the temperature drops this December, consumers have been cooling off, too.

More than 172 million shoppers visited stores on the weekend after Thanksgiving – the official kickoff of the holiday shopping season – an increase of almost 30 million shoppers over last year, according to the National Retail Federation (NRF).

Each Black Friday consumer also spent about $30 more than last year, the NRF reported, which seems to fly in the face of the recession gripping the nation.

But the downturn actually caused this year’s mad rush on Black Friday, said Mark Kleinschmidt, president of the New Castle County Chamber of Commerce.

Consumers looking to save money flocked to the malls to take advantage of Black Friday’s huge discounts, inflating this year’s sales numbers, Kleinschmidt said, but he expects people to shop more sporadically now that the deals are gone.

“Consumers are still in a position to spend, but they are looking to spend smarter,” he said.

Retailers in Delaware, the home of tax-free shopping, are well-positioned to take advantage of cost-conscious shoppers in Pennsylvania and New Jersey looking to avoid sales taxes this season, he said.

From what he's heard in talking with numerous business owners, the county has already seen an increase in business at stores lining Delaware’s border, Kleinschmidt said.

But even with more shoppers visiting from out of state, this is going to be a challenging season for retailers across the county, he said.

Many retailers in the county have adopted a very conservative outlook for this holiday season, mostly because of lagging consumer confidence, said Ken Brennan, vice chair of the Delaware Retail Council.

Some consumers plan to spend less this year because they actually have less money to spend, he said, but there are other factors at work affecting consumer confidence.

“It’s more difficult to estimate the impact of the media’s incessant negative drumbeat on households whose incomes are not and will not be directly affected, but whose spending may be reduced because of the psychological impacts of what seems to be pervasive bad news,” he said.

The consumer confidence index actually rose in November to 44.9, up from an all time low in October of 38.8. The index, created from a monthly survey of 5,000 households that asks about consumers' levels of optimism for today's economy and the future, is sponsored by The Conference Board, a nonprofit research firm.

But the fact that Black Friday sales were better than predicted proves that it will take more than the current economic turbulence to keep the American consumer at home this holiday season, he said.

Whether their economic woes are real or imagined, consumers have changed their spending habits this holiday season.

For example, more shoppers are visiting the Hockessin Book Shelf, but they are spending less than they did last year, said store owner Rebecca Dowling. People are shopping more carefully, she said, buying specific books for specific people, instead of purchasing a whole box full of paperbacks for stocking stuffers.

“Nothing’s really flying out of the store like it has in the past,” she said.

Customers are also leaning more heavily on the store’s used book section for gifts, Dowling said.

But despite the slowdown in spending, Dowling said her holiday retail numbers are on track.

The spending slowdown has had a more dramatic affect at DBC Collectibles in Claymont.

A customer typically spends about $50 on gifts at the store, but this year, customers are capping their orders at $30, said store owner Dave Carletti.

He expected sales to be slow this December, but not as slow as they have been -- Carletti’s revenue has been dropping steadily since September.

Holiday sales account for about 40 percent of his business, so a good December is almost a necessity in the world of retail, he said.

While Carletti is hoping consumers come out of their spending funk soon, he is expecting things to get far worse before December is over.