Even in good times, Midwesterners tend to be more conservative shoppers than those in other parts of the country.
But a report released Wednesday by the University of St. Thomas indicates that Twin Cities shoppers are planning their most meager holiday in years. Holiday spending is expected to drop almost 12 percent compared with last year, taking an estimated $102 million out of the local economy.
The findings put Twin Cities retailers in far worse shape than the national average.
"We were surprised by the magnitude of the drop," said marketing professor David Brennan, who wrote the study with two colleagues at the university's Institute for Retailing Excellence. "We had no idea it would turn out this bleak. I think we'll see additional fallout with store closings and bankruptcies."
Among the national retail groups making holiday sales predictions, estimates range from a 6.5 percent drop, according to Deloitte and Touche, to a 2.2 percent rise, from the National Retail Federation.
Another survey released Wednesday, by ShopperTrak RCT, predicted that holiday traffic at retailers could decline 9.9 percent. Promotions already are being used to try to reel in shoppers, and prices could get slashed even more in coming weeks.
While great for bargain hunters, deep discounts will "particularly hurt the independents and the smaller shops," Brennan said. "They can't afford to cut prices 30, 40 or 50 percent. That's the sad part of it."
The Twin Cities' regional malls and both downtowns will fare worse than non-mall stores, according to the survey of 659 Twin Cities households. Brookdale and downtown St. Paul are likely to see the biggest drops in traffic and sales.
