US shops dream of a hot Christmas

Click to follow
The Independent Online
FOR MILLIONS of Americans, the day after Thanksgiving began before dawn. They set their alarms, skipped muffins and pancakes for breakfast, piled into their cars and headed for the malls armed with dollars, plastic and the sheaves of coupons diligently cut from newspapers. It's five in the morning on "Black Friday" 1998.

"Black" has nothing to do with the misery that some of us may associate with shopping. This is the day that traditionally kicks off this country's Christmas gift-buying season when retailers expect their account books magically to change colour from red to black in just a few hours. And this year, their hopes are as high as they could possibly be. Americans, we are told, are ready to spend, spend, spend.

While retailers in the high streets of Britain are bracing themselves for what some predict will be the worst Christmas season in decades, the outlook in the US is entirely to the contrary. A remarkable confluence of cheery economic factors - rock-bottom inflation and unemployment, minimal interest rates and a once-more zooming stock market - has everybody in the mood to splash out.

"It doesn't get much better than this," confirmed Carl Steidtmann, chief retail economist for PricewaterhouseCoopers in New York. "We have a very robust consumer environment with good employment growth and income growth. It should be a good Christmas."

What is hot on the shelves on this side of the water? Dark jeans and humidors for the guys (the cigar fad shows no sign of fading) and soft fabrics for the ladies, especially anything in chenille and velvet. And as usual a single toy has emerged as the must-have-but-nowhere-to-be-found item for parents desperate to please their offspring. Made by Hasbro, it is a fluffy robot that goes by the name of Furby.

Only a few weeks have passed since retailers in the US were as fretful as they are in Britain now. Then there was anxiety that various factors were combining to chill the US economy - trouble in Russia and the Far East, a slumping Wall Street and even what seemed then to be the steam- train momentum of the Clinton impeachment scandal. All those worries seem, suddenly, to have evaporated.

Only a spoilsport might pause to note those things that could yet cause concern. As the latest indicators of consumer confidence have started once more to climb after three months of decline, other surveys highlight a rude fact that few seem ready to acknowledge: Americans, never much good at putting aside money in savings, are spending more on their lifestyle than they actually earn.

It was Furby Fever that prompted some malls to open yesterday not at the traditional hour of 7am - early enough, you would think - but at 6am or earlier. At one mall in Cambridge, just outside Boston, Massachusetts, a line of 80 people had formed before its doors opened at 6am. By 6.05am, the main toyshop inside, K-B Toys, was sold out of its entire stock of 100 Furby dolls.

"I've been here all night for this foolishness," admitted Bill Zamparelli, a father-of-three who managed to snap up two of the creatures, which come in a variety of colour schemes and have alleged interactive powers.

They close their eyes in the dark when it is time to sleep and speak to each other, in Furbish, and to their owners in English. "This is an experience that I do not choose to go through again," he added.

As well as the usual enticements offered to shoppers, including the introduction now of huge discounts that traditionally were not seen until after Christmas, American malls go the extra mile to make the shopping experience survivable. In affluent suburbs, visitors can expect valet parking, lockers for the purchases they don't want to lug around and free push chairs for their kids.

The raging economy - the Dow Jones index on Wall Street was back in record territory this week - is presenting the retail industry with one problem: it cannot find the people to man the tills. The shortage is bad news for shoppers too, who may find long queues at checkouts and nobody around to assist them in their search for goods.

With national unemployment now running at a mere 4.6 per cent, those willing to take seven dollars an hour for a seasonal job in Macy's or Bloomingdales are few and far between.

Some of the pressure may be eased by the ascendancy of shopping by catalogues and over the Internet. Recent surveys show that nearly half of all Americans with access to the Internet with PCs at home will do some of their Christmas shopping in cyberspace. About $2.3bn (pounds 1.4bn)may be spent on gifts online this season, more than double what was spent by cyber means last year.

Concerns about the kind of hangover that may follow this season's spending spree were highlighted by new savings rate figures published by the US Commerce Department this week. They showed that for the first time since 1933, the US savings rate was negative for two months in a row at minus 0.1 per cent in September and minus 0.2 per cent in October.

In other words, Americans on average were spending slightly more than they were taking in from wages, rental income, dividends and interest on savings.

Let The Cash Tills Ring

American shoppers who admit they have no pre-set budget for their Christmas shopping: 68 per cent

How much the average American is expected to spend on Christmas gifts this year: $1,000 (pounds 625) (Last year: $800)

How much all US consumers are expected to spend between Thanskgiving and Christmas: $3.5bn a day.

Rise in US consumer confidence in November: 5.6 per cent

Extent of Dow Jones index rebound since 31 August: plus 1,755 points.

Record Dow Jones high: 9,374 on Monday.

Numbers of individual Americans who filed for bankruptcy last year: 1.4 million (up 300 per cent since 1980)