Bah Humbug! Slow Shopping Season Expected

Nov. 5 -- There may still be 51 shopping days left until Christmas, but many retailers are already bracing themselves for a chilly reaction from consumers this holiday season.

A lethal combination of mounting job losses, depressed consumer confidence and delayed or nonexistent deliveries due to the West Coast port slowdown are all conspiring to make the crucial holiday shopping period a potentially dismal one for retailers.

"I think people are cautious," says Harvard University economics professor Benjamin Friedman. "Some people are simply not able to spend and those that can are being careful."

Signs of decreased consumer spending have already shown up in recent economic reports, and many retailers have been reporting sales on the low end or below expectations.

October's jobless rate climbed to 5.7 percent in October, with the number of people looking for work but unable to find it rising by 100,000 to 8.2 million, according to the latest Labor Department figures.

And consumer spending, one of the pillars that have been holding up the U.S. economy, fell 0.4 percent in September, the largest drop in 10 months, according to the U.S. Commerce Department.

"There's going to be a lot of $200 or $300 purchases that may have been made two years ago that won't get made this year," predicts Ross DeVol, senior economist at the Milken Institute, a Southern California-based think tank.

Shoppers Retreating

Some retailers have already blamed declining mall traffic as one of the reasons for slumping sales. Recently, stores like jewelry retail chain Zales and youth-centered clothing retailers Charlotte Russe and Children's Place have all cited slow mall traffic for disappointing results in their latest earnings periods.

"Many of these malls, they are not very proactive and not very creative," says Arun Jain, professor of marketing at the University at Buffalo School of Management, part of the State University of New York system. "They need to do things that will drive people to the mall."