NEW YORK (AP) — This holiday season, Americans may not spend their green unless they see more
red.Despitesigns that the economy is improving, big store chains like Wal-Mart andKohl’s don’t expect
Americans to have much holiday shopping cheerunless they see bold, red signs that offer huge discounts. As a
result,shoppers are seeing big sales events earlier and more often than inprevious holiday seasons.Retailers
are trying to lure shoppers like Marissa Anwar, who has been doing more bargain hunting compared with last
year.Theoperations consultant, who lives in Toronto and New York City, said theeconomy "hasn’t been
great" and she’s lost clients. As a result, shecut her shopping budget to $2,800 from last year’s
$4,000."I was a former ‘spend-aholic,”’said Anwar, 29. "Now, I want to make sure I have the money
before I spend it."It’sa problem that retailers know all too well. Since the recession beganin late
2007, stores have had to offer financially-strapped Americansever bigger price cuts just to get them into
stores. But those discountseat away at profits.So far, Wal-Mart, Target and Kohl’s areamong more than two
dozen major chains that lowered their profitoutlooks for either the quarter or the year. A big reason is
theexpectation that they’ll have to offer huge discounts in order to getshoppers to spend.There are already
signs that retailers areaggressively discounting. Wal-Mart, for instance, on Friday startedmatching or
beating the prices that certain competitors like Best Buyare advertising for some toys and electronics for
the day afterThanksgiving — known as Black Friday. Best Buy also plans to matchrivals’ prices, even after
customers have purchased items. And Target,better known for its whimsical advertising, is touting its prices
inholiday TV ads for the first time in at least a decade.Thetempered expectations, earlier discounting and
lowered profit outlooksfrom retailers come even though there are indications that the economyis recovering.
The job market is making strides. The housing market isstarting to come back. And the stock market keeps
hitting new highs. Allthat would ordinarily lead Americans to spend more.But so far,those improvements
haven’t been enough to shore up consumer confidence.In fact, Americans’ confidence in the economy is at its
lowest levelsince April."Stores know that they are well into a fight," saidKen Perkins, president
of the research firm RetailMetrics. "The vastmajority of consumers are distressed."Not that there
aren’t glimmers of hope that Americans will spend again.Retailsales were up 0.4 percent in October, after
being flat the previousmonth, according to the Commerce Department. Americans spent on bigticket item such
as cars and furniture, but that may have left them withless room for more discretionary times like clothing
this holidayseason.Overall, The National Retail Federation expects retailsales to be up 3.9 percent to
$602.1 billion during the last two monthsof the year. That’s higher than last year’s 3.5 percent growth,
butbelow the 6 percent pace seen before the recession.Retailers say economic worries continue to weigh on
shoppers heading into the holiday shopping season."Wecontinue to see anxiety regarding the economy and
the ability to staywithin household budgets, particularly among lower and middle-incomeconsumers," said
Kathee Tesija, executive vice president ofmerchandising for Target, which trimmed its annual profit outlook
onThursday.In particular, some Americans still are getting used tosmaller paychecks because of a 2
percentage point increase in the SocialSecurity payroll tax that started on Jan. 1. That means that
take-homepay for a household earning $50,000 a year has been cut by $1,000. Thatwas a concern Wal-Mart noted
on Nov. 14 when it lowered its annualprofit guidance for the second time in three months."It’s goingto
be as competitive of a market as we’ve ever seen," said CharlesHolley, Wal-Mart’s chief financial
officer, adding that among the issuesthat the discounter faces are "the economic conditions that
thecustomer is under."Stores also say customers don’t want to spendbecause they’re uncertain about
their health care costs next year due tothe U.S. health care overhaul. Additionally, stagnant wages
aren’tkeeping up with daily living costs. Not to mention, some people arestill out of work.Leslie Lynch, 52,
said she won’t be buying anyholiday gifts because she was laid off from her job in marketing at aninsurance
company in August 2012 and hasn’t been able to find a jobsince. Lynch, who lives with her wife who works in
quality control at amachine shop, said she is behind in mortgage payments and is afraid shewill lose her
house."We will probably have dinner and that’sabout it," said Lynch, who lives in Glastonbury,
Conn. "Hopefully, wewill have Christmas next summer."____AP Economics Writer Chris Rugaber in
Washington contributed to this report.Follow Anne D’Innocenzio at www.Twitter.com/adinnocenzio.Copyright
2013 The Associated Press. All rightsreserved. This material may not be published, broadcast, rewritten
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