Anne Leopold is the kind of consumer who is giving Washington retailers fits this Christmas season.
"I'm trying to keep spending down and shop only sales," said Leopold, leaning against the perfume counter at the Woodward & Lothrop store in Alexandria's Landmark shopping center. "I'm not going to go into a store this year and buy something decorative. I might have last year." Leopold, a psychological researcher with the Army Research Institute who earns about $17,000, plans to spend $300 for Christmas gifts -- about $50 more than last year.
"I'm not spending less, and yet I'm not spending a lot more either," she said. "I guess I'm just more cautious than I used to be." Instead of buying those "decorative" items that garnished her Christmas last year, Leopold is buying suit hangers, slippers and sweaters.
All around the Washington area this season, most consumers, mindful of hard times, are gripping their pocketbooks tightly and passing up most of the gimmicky gifts of Christmases past that meant big profits for merchants.
They are spending later, smarter and slower than last year, judging from interviews with shoppers at four area malls and reports of local merchants. It appears the recession is having very uneven effects. The unemployed are not shopping much and those in mid-level jobs are being more cautious, while consumers with money are spending it.
Meanwhile, at the stores themselves, the large retailers with deep pockets who can afford to advertise and promote heavily appear to be doing fairly well. But many smaller merchants say the Christmas season, which can make or break them, looks very bleak.
Overall, retailers say sales have been up slightly so far this month but that they need a surge in spending if they are going to top last December's mark of $1.75 billion in sales for the Washington region and strengthen overall yearly figures that are up only slightly from last year.
"Business has picked up" since Dec. 11, when sales for the year were the same as last year, says Leonard Kolodny, bureau manager of the Washington Board of Trade. But "whether this is going to be enough to put us over the top compared to last year is still uncertain."
Washington retailers are comparatively better off than most of their counterparts across the country. The Washington metropolitan area has one of the lowest unemployment rates in the country -- 5.8 percent compared to 10.8 percent nationally.
And it is also one of the most free-spending areas. Although it is the eighth largest metropolitan area in terms of population, Washington ranks third in spending per household--$15,132 a year last year.
Major Washington retailers report that those two factors, coupled with very heavy advertising, will help them meet last year's sales figures and probably exceed them.
The volatility of the Christmas season nationally was shown recently when a 19-point drop on the Dow Jones average on Dec. 9 was led by companies that make electronic games. Analysts said the tumble was caused by fears that the holiday season would not be all that manufacturers had hoped.
This "will be a rather mediocre Christmas" nationally and in Washington, says Jeff Edelman, a retail analyst at Dean Witter Reynolds.
"Business has been very soft, and it's been running below budget," says Edelman, who adds sales probably "will be up about 3 to 4 percent," not enough to make up for inflation.
Inflation is on shoppers' minds also as they try to hold the line on their purchases. "I want to spend less, and I'm trying to spend less, and I don't think I'm buying any more than I did last year. But it looks like I'm still going to spend more. Everything just costs so much more," says Charlotte Delbridge, waiting at the candy counter at Woodies in Alexandria to buy a $9 E.T. plastic cup filled with Reese's Pieces for her 11-year-old son Geoffrey.
Delbridge, who supports a family of four children on her $20,000 salary as a salesperson, says she allotted herself the same amount she did last year -- $500--for the dozen people on her list, but expects the total to be higher when all is added up.
It's difficult to judge, because retailers are loath to release their sales figures, but a survey of several large and small businesses suggests that the smaller ones are being hit disproportionately hard by a recession that has taken some newly unemployed consumers out of the shopping market altogether.
Sorely pressed to sustain themselves through extended lags in sales, these small-store owners many times cannot compete and are reporting, in the words of one manager, "one of the worst Christmas seasons ever."
"Its just the pits. Business is bad, real bad," says Franklin Neal, manager of Shirt Tails, a stylish men's clothing store in Prince George's Plaza. Large going-out-of-business signs are stripped across the windows of the store Neal has managed for 13 years. Sweaters are marked down to $15.99. Ralph Lauren shirts are on sale for two for $45.
Under such conditions, Neal says, monthly sales figures should be up 50 percent, but "ours are only up 10 percent."
On the other hand, big retailers in the Washington area like Woodies, Sears and Hecht's say they are seeing a steady and surprising improvement in a year when they expected only modest results because of the recession.
They say that sales figures for this final quarter--the most important period for retailers' profits -- are slightly ahead of last year. Reaching those figures, however, apparently will not come cheaply.
Major area retailers reportedly are laying out record amounts to lure buyers into their stores--pouring money into broadcast and print advertising, and direct mailings. And, many stores are holding clearance sales now rather than after Christmas. That promotional combination, says Garfinckel's chairman William Detwiler, is "putting pressure on profit margins."
The gap between the have and have-not stores is mirrored in the wide range of customers' spending powers. There are some shoppers who say that they're not just spending more than last year, they're spending a lot more.
"I've got a new girlfriend. It's Christmas, and the only thing the economy is affecting is my mortgage," said John Boldovici, a researcher who earns $40,000 a year.
Boldovici was buying some perfume at the Alexandria Woodies for his girlfiend and carrying two large bags filled with newly purchased winter clothes. The perfume was one of the smallest items on an expansive Christmas shopping list that he says will cost him $1,000 this year -- $600 more than last year.
Consumers like Boldovici are an example of what store owners describe as the unevenness of the recession. The unemployed are not shopping much, those in mid-level jobs are being more cautious, while consumers with money are spending it.
"The clientele who can afford to buy a Rolex are still buying it," says Kirk Lansdale, manager of R. Harris and P. Paul Jewelers in Springfield. Saks-Jandel, one of the most exclusive women's clothing shops and furriers in the Washington area, says its sales are up 20 percent over last year.
Margo Furr of Alexandria is the type of customer the more expensive shops like. Furr has a thing about Christmas. She likes it and she likes to spend a lot of money.
More important, she has the money. She and her husband earn about $50,000 a year. She's a secretary and he's a delivery salesman. This year, she says, she plans to spend $1,500: she bought one of her sons a stereo and expects to shell out about $400 for her husband, probably on something similar to the leather coat she bought him last year. He also bought her a leather coat last year.
"I'm probably too extravagant, but I don't like to scrimp at Christmas time," says Furr, sitting with her three grandchildren and their mother by one of the big Christmas trees at Springfield Mall. "I've got a lot of bills to pay, but every year I save for Christmas and I spend every dime of it and more."
Unlike Furr, there are Washington area residents who are fearful of what course the economy may take and have cut back considerably on their Christmas spending. Last year, Lanham resident Dorothy Curtis spent $800 on Christmas. This year, her husband, a procurement analyst with the federal government who earns about $20,000, handed her $500 and told her not to spend more.
So, for the last several months Curtis has been working steadily on sewing clothes and painting trays and other wood crafts for the 25 people on her Christmas list. The $500, she says will go for buying toys for her grandchildren and a few other things she cannot make.
"There was a time when Christmas shopping was fun," Curtis says, sitting on one of the blond benches in Prince George's Plaza. "But not anymore. I feel so dragged trying to get it all done and buy things I can afford and other people will like. Last year, I bought flannel shirts for $6.99. This year, they are $11 and $12, so I decided to make them.
"My husband has worked for the government for more than 20 years," she continues, "but now with all the rifs you never know when your day might come. We're afraid to spend too much money for Christmas. We might need it later."