The year of holiday thrift
More consumers than last year say they'll look for bargains. Thrift shops are in.
The United States is becoming a nation of frugal bargain hunters.Skip to next paragraph
Subscribe Today to the Monitor
This holiday period, Americans of all backgrounds are discovering what it takes to become a professional penny pincher and what makes a dollar stretch.
Some are forgoing the department store for Wal-Mart or Target. Gift givers are crowding into Goodwill or the local thrift store. Coupon clipping has practically become a new religion. And the latest stories to tell at parties start with: "Want to hear how I haggled with the merchant?"
Evidence of this declining interest in shopping came Wednesday, when the US Commerce Department reported that personal spending in October fell by 0.5 percent after falling 3.7 percent in the third quarter.
The deal hunters are expected to be out even more the day after Thanksgiving, when retailers traditionally use promotions and sales to entice Americans to shop. One early survey shows that 45 percent of Americans, up nine percentage points from last year, plan to look for high-definition television sets at reduced rates or anything else that discounters plan to offer at a low, low price.
"Almost half the people polled are looking to save money," says Erin Hershkowitz, a spokeswoman for the International Council of Shopping Centers, which did the early survey of shoppers. "The one retail sector still showing positive results is the discounters."
It's no surprise that the main catalyst for the transformation is the economy. The decline in US housing prices, for example, is making it increasingly difficult to use the house as a piggy bank. This lesson hit hard for Leah Ingram of New Hope, Pa.
In the good old days – only a few years ago – Ms. Ingram and her husband took advantage of the rising price of their house by refinancing and pulling out their equity in cash.
"We took out a bona fide home-equity line, too, and put a front porch on the old house," Ingram recalls. "We took a cruise and six months later did it again."
That was then. When they sold their old house, they got less than anticipated. When they bought a new house, their payments were higher – while they have the same income. Now, she scans the circulars for coupons every week, and she visits thrift shops for her clothes.
"We went from living $500 a month in the red to $800 in the black," says the freelance writer.
Her daughters have also embraced the concept, shopping at Plato's Closet, which sells designer-name children's clothes at a discount. "My 11-year-old loves Abercrombie clothes and saw a T-shirt for $50," Ingram recounts. "She said, 'Who can spend that kind of money? I can go to Plato's and get one for $15.' "
Ingram's spending regimen extends to the holidays. She will make her own holiday decorations. "Two years ago, I would have gone to the gardening center and bought pine boughs," she says. "Now, I can't do that anymore."
She isn't the only one economizing. Businesses that help people save report that business is booming. At Coupons.com, business is up 50 percent in the past three months. Consumer savings using Coupons.com have soared from $26 million in August to $40 million in October.
"We've never seen the rate of use this high at this time of year," says Steven Boal, CEO of the company, which is based in Mountain View, Calif. "People are branching out into lots of different categories and searching the site more frequently."