Consumers Fly Flags but Hide Wallets

More consumers headed back to the stores over the weekend, but neither a presidential plea for normality nor a surge of patriotism were enough to bring retail spending back to usual levels.

And although many economists expect the number of shoppers to continue edging up, most say there’s little hope for a full retail rebound at least through the end of the year.

Sales over the weekend were off normal levels by 5% to 20%, depending on region, with Southern California reporting about a 10% decline, according to America’s Research Group, which surveyed about 2,000 people nationwide.

The worst retail performance continued to come from the Northeast, in areas most affected by the attacks on the World Trade Center and the Pentagon; the Midwestern states fared the best, according to the market research firm’s chairman, C. Britt Beemer.

The most recent numbers were much improved from the weekend just after the Sept. 11 attacks, Beemer said, when sales were off as much as 50% from expected levels.

“I think we’re going to have a down Christmas--I’d be surprised if we come close to last year’s numbers,” Beemer said. “This is a terrible retail year. It’s a retail depression.”

Consumer shopping trends have been a closely watched gauge of the broader economy this year, as Americans’ continued willingness to spend money had been credited with keeping the country out of a recession. Consumer spending makes up two-thirds of the U.S. economy.

Until the attacks, some financial analysts and economists had been predicting better sales in the second half of the year. But consumer reaction since Sept. 11 has led many financial watchers to cut their estimates for fall and holiday spending.

“I think that people are quite a bit more risk averse,” said Eugene Anderson, a professor of marketing at the University of Michigan and one of the researchers for the American Customer Satisfaction Index. “They have less confidence in terms of what the future is going to be like, which makes it harder to plan all kinds of purchases.”

The National Retail Federation, a generally bullish trade group, was the latest to reduce sales projections, saying that job losses, the plunging stock market and worries about war probably would mean the worst holiday season in more than a decade. The NRF predicted holiday sales would rise 2.5% to 3% over last year. Before the terrorist attacks, the group had predicted a 4% to 4.5% gain.

Fourth-quarter sales, the group said, probably would gain 2.2%, rather than the 4% earlier predicted.

PricewaterhouseCoopers predicted sales increases as low as those of the recession of 1991, with a 1.5% gain in sales for the fourth quarter compared with last year.

As shoppers made the rounds over the weekend, many said they were putting off nonessential purchases, preferring to save money.

There were plenty of shoppers at South Coast Plaza in Orange County on Saturday afternoon, but also plenty of empty parking spaces. Flags hung in some store windows and shoppers wore red, white and blue T-shirts, pins and ribbons.

Betty Smith, 79, knows what she wants in times like these.

“No frilly stuff, just sensible,” said the Santa Ana resident, who was drawn to a rack at Sears that held dresses for $29.98.

Frederick Claus, 51, said although he had to buy some new clothes for work, he has postponed plans to buy a new car.

“I just couldn’t make that kind of a commitment,” the Aliso Viejo resident said.

At a northeast San Fernando Valley Home Depot, employees said they couldn’t remember such a slow Saturday. Aisles were mostly clear, save for the few professional contractors in work boots and paint-covered clothing.

And at the car dealerships that line Van Nuys Boulevard, some showrooms were nearly empty, with salespeople milling outside and having a smoke.

Few had more than two or three customers kicking the tires on what is normally a busy day.

But in Santa Monica, Chevrolet salesman Tom Piraino said he’s optimistic about one thing: a renewed focus on buying American-made goods.

With the lease up on her Toyota 4Runner SUV, Barbara Lao said she was turning to an American car for the first time.

“I wanted to be more patriotic and get a true American model,” she said, choosing a Chevy Tahoe SUV, in Victory Red, for $5,000 less than she originally planned. “I am being more careful with my money and spending less,” Lao said. “Who knows what’s going to happen? I think that a lot of people are feeling this way.”

Before the attacks, about 24% of shoppers nationwide said they tried to buy only American-made goods, market researcher Beemer said; in the last two weeks, the number has risen to 32%.

Other shoppers said they were taking to heart President Bush’s exhortations to follow their normal routines.

At the North Hollywood Target store, 48-year-old Susan Duff of Toluca Lake pushed her cart through a long line of willing shoppers.

“I’m going to spend and keep my part of the economy flowing,” she said. “I’m nervous, but if we start pulling back, everyone is going to suffer.”

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Times staff writer Leslie Earnest contributed to this report.