Holiday 2010: The Year Shoppers Came Back

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NEW YORK — Shoppers came back in force for the holidays, right to the very end. After two dreary years, Christmas 2010 will go down as the moment when Americans rediscovered how much they like to shop.

People spent more than expected on family and friends and splurged on themselves, too, an ingredient missing for the past two Christmases. Clothing such as fur vests and beaded sweaters replaced practical items like pots and pans. Even the family dog is getting a little something extra.

“You saw joy back in the holiday season,” said Sherif Mityas, partner in the retail practice at A.T. Kearney.

A strong Christmas Eve rounded out a great season for retailers. The National Retail Federation predicts that holiday spending will reach $451.5 billion this year, up 3.3 percent over last year.

That would be the biggest increase since 2006, and the largest total since a record $452.8 billion in 2007. And a strong week after Christmas could make this shopping season the biggest of all time. Final figures won’t be available until next week.

The economy hasn’t drastically improved from last year. Unemployment is 9.8 percent, credit remains tight and the housing market is moribund. But recent economic reports suggest employers are laying off fewer workers, and businesses are ordering more computers and appliances. Shoppers are spending with more confidence.

“I was unemployed last year, so I’m feeling better,” said Hope Jackson, who was at Maryland’s Mall in Columbia on Friday morning. Jackson bought laptops and PlayStation 2 games for her three daughters earlier in the season but was at the mall on Christmas Eve to grab $50 shirts marked down to $12 at Aeropostale.

Much of the spending growth has been online, driven by more free shipping offers and convenience. So far this year, $36.4 billion has been spent online, a 15.4 increase over last year, according to MasterCard Advisors’ SpendingPulse.

Taubman Centers and Mall of America have reported strong sales in fashion, which were a hard sell last year. Jewelry sales sparkled throughout the season.

Stores expect solid profits because they didn’t have to resort to desperate, fire-sale discounts to move merchandise, analysts say.

Some shopping habits learned from the recession linger. One big lesson taught by the recession: using cash, not credit. Shoppers also hunted for deals, a trend that doesn’t seem to be going away anytime soon.

“You’re constantly looking for bargains. Anything at a bargain,” Danny Colon said as he walked into a Sears in Hialeah, Fla., on Friday.

Bargains will abound Sunday, when after-Christmas sales begin. The week after Christmas accounts for more than 15 percent of holiday spending, research firm ShopperTrak says. That business has become more important over the years as gift cards became more popular.

The key question is whether the shopping frenzy will continue beyond Jan. 1.

“There will be improvement over 2010, but there’s no reason to go crazy,” Mityas said. “We are happy about the holidays, but it will be a slow climb back to the heyday.”

Still, stores were encouraged by what they saw in the final stretch of the holiday season. Malls were packed.

Best Buy in Union Square in New York had about 300 people in the store Friday morning, said manager Amy Adoniz. And she said more than 100 online orders for e-book readers, laptops and other gizmos were coming in every hour for store pickup.

“People are in the holiday spirit. They’re feeling more at ease,” she said.

Even pets made it back onto gift lists this year. Three Dog Bakery is a pet-supply chain whose specialties include $15.99 jars of banana-nut dog cookies and $65 dog coats. Its Clinton Township, Mich., location, which opened three years ago at the start of the recession, reported its biggest day ever Wednesday.

“We opened at the worst possible time in the world. Everyone was pulling back,” said Chad Konzen, who owns the store. “Gourmet all-natural dog treats are not a necessity – a luxury. But now people are feeling more comfortable. You can only be thrifty for so long.”

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