Skittish shoppers perplex Utah retailers

Given the Great Recession, many shoppers are acting like West Valley City homemaker Beverly Smith, and her actions illustrate the challenges retailers face.

"I base my shopping decisions on needs, not wants," said Smith, who has two teenagers and a 5-year-old boy living at home. "I don't buy the cheapest or the most expensive name brand. I look for quality so that things will last, and I always do my homework."

Before she buys, Smith researches products on the Internet. She also scouts online sales and ads in the Sunday newspaper. Her purchases are deliberate -- no impulse shopping -- and carefully timed. She bought a pair of shoes when her 5 -year old son began kindergarten but she's waiting until the weather cools

before she purchases boots.

Nothing short of huge bargains are likely to attract her and many other shoppers, but they have to be distinctive, unlikely to be repeated or -- heaven forbid -- undone by a bigger price reduction the following week.

There are signs that consumers are itching to spend, but the motive that drove hundreds of thousands of Americans to take advantage of the Cash for Clunkers program and many others to buy houses in recent months had the advantage of being backed by thousands of dollars in incentives.

That's something everyday retailers can't match, even with their deepest discounts.

As recently as a year ago, Abercrombie & Fitch was the most popular clothing store among teens and

college-age students, despite its higher prices. Yet as the economic downturn deepened, many shoppers turned to less-expensive stores, such as American Eagle Outfitters Inc. and Forever 21. After being hammered by revenue declines of nearly 30 percent when it refused to lower prices, Abercrombie relented this summer.

"I would characterize consumers as discriminating and seeking value, " said Marie Driscoll, a retail analyst with Standard & Poor's Equity Research. "In the aggregate, they are more cautious, asking, 'Do I really need it?' "

Audrey Turley, a 33-year-old mother of twin girls, said she often waits until the last minute to buy needed items. Recently she filled her shopping cart at a Salt Lake County Target store with clothing for her 20-month-old girls, but ended up putting back half the items.

"Before I get to the cash register, I ask myself again if this is really what my family needs right now," she said.

But after months of penny-pitching in this economic downturn, some consumers are finding other ways to spend that might pay off down the road.

Nancy Yorgason of West Valley City has trouble passing up a killer deal, so the mother of six has developed a new strategy. Rather than immediately giving her children a book or clothes that she has picked up on sale, "I now put them away in a closet for Christmas. Instead of disciplining myself not to buy, I'm disciplining myself to put things away as a gift for later."

Even though one in four women say they are ready to treat themselves to a new outfit, a night out on the town or a vacation, American shoppers in general are living through a correction in their spending habits, according to the consumer behavior research firm WSL Strategic Retail. For instance, 28 percent of the shoppers surveyed said they were putting more into savings -- up 9 percentage points in the past six months.

Camilla Hyde, a mother of four in Syracuse, has started a day care business to supplement her husband's income. At this point, they are paying off bills, but as soon as they can they'll sock away money.

Hyde is discouraged about having to save because the couples' investments lost ground in the economic meltdown, "but there's no other alternative."

Whether or when consumer spending returns to what it was is anyone's guess, but there is no doubting that spending is important to the economy, accounting for two-thirds of the nation's Gross Domestic Product.

University of Michigan economist Donald Grimes, for one, credits Cash for Clunkers with boosting overall economic morale.

"It got people thinking about spending money again," he said. "The recession was so severe that people almost became shell shocked in terms of buying. But the clunkers program was too good a deal to pass up. It nudged consumers out of their shell."

Grimes said a broader recovery depends on the willingness of less-flush consumers to buy, although he does not envision a return to impulse spending that seemed commonplace earlier this decade.

Retail sales have continued to decline for 12 consecutive months nationwide. Although major retail chains reported that August sales were down 2 percent from the same month last year, it was the best performance since September 2008, when the financial markets imploded.

The New York-based International Council of Shopping Centers, which gathered the figures, said the sales environment in August was stronger than expected and could "mark a turning point in the retail sales cycle as the economy continues to shed its drag."

But in perhaps a cautionary sign, Ryan Nordgren, 35, a Salt Lake County father of five, said he's still putting off big-ticket spending, such as a trip to Disneyland.

"Even though the economy is looking better, I'm not comfortable yet."

dawn@sltrib.com

The Associated Press and New York Times contributed to this story.