Shoppers return to stores but buy selectively
By Anne D'Innocenzio
NEW YORK Julie Bernstein used to always dress in black, but since the U.S.-led war in Iraq began, she's donning bright colors like cobalt blue. She's also purchased her first bright red lipstick and nail polish.
"The atmosphere is depressing. I want to pretend this isn't happening," said Bernstein, a book publicist from Danbury, Conn.
Borders Group Inc., the second-largest bookseller behind Barnes & Noble Inc., said sales of books on home cooking and home improvement have accelerated since just before the war, along with political books on the Middle East.
Wal-Mart Stores Inc. and others also reported an uptick in sales of flags, while some clothing stores such as Proffitt's cited an increase in sales of red, white and blue clothing.
On the other hand, shoppers are snubbing big ticket items like suits and serious jewelry, as well as other basic items, such as black T-shirts, stores said.
Consumers' focus on feel-good items reflects similar spending patterns after the Sept. 11 terrorist attacks. But, given the sluggish economic environment and mounting job worries, shoppers are now even more focused on price.
"War is making people more nervous about money," said Marian Salzman, chief strategy officer at Euro RSCG Worldwide, a New York-based marketing company.
For example, Bernstein said that while she plans to buy some bright clothing this spring, she's not going to splurge.
"I'm worried about the economy," she said.
Robbie Blinkoff, principal anthropologist at Baltimore-based Context Based Research Group, which specializes in ethnography, said he sees a "blip" similar to what he saw after the terrorist attacks, but the real issue is "what happens after that."
In the months following Sept. 11, consumers stayed closer to home, spending generously on their houses, as well as on crafts. They also bought comfortable clothes such as big sweaters. And while Blinkoff expects shoppers this time to re-establish connections with friends and family, the question is how much they will spend, and whether they will make big purchases.
"The behavior will be more tempered. It is not going to be this off-the-chart reaction," Blinkoff predicted.
Fears of a prolonged war in Iraq continue to hurt retailers, which reported sluggish sales last week.
Wal-Mart, the world's largest retailer, said this week that same-store sales sales at stores that have been open at least a year will be at the low end of its forecast of low single-digit gains in March. Executives said they continue to see the "CNN effect," as shoppers stay home to watch news coverage on the war in Iraq.
And while Wal-Mart said spending is back to normal for the most part, other retail executives noted specific trends.
At Saks Fifth Avenue, Proffitt's and other department stores, which have suffered from a sluggish economy, bright colors are faring better than before the war started. And while the arrival of spring has helped spark business, executives believe consumers are also embracing colors as therapy in dark times.
"People are using it as some pick-me-up," said Toni Browning, president and chief executive of Proffitt's, a division of Saks Inc.
Instead of buying investment clothing, shoppers are opting for disposable items moderately-priced clothes that can be thrown away after one season, she said. Proffitt's also has seen an increase in sales of bath rubs and bath salts, as well as relaxation tapes.
High-end stores also have seen a migration to bright colors, though price has not been an issue.
Robert Burke, vice president at Bergdorf Goodman, said sales of colorful clothing from designers Chanel and Donna Karan, bright-hued accessories and spa and bath products have done even better since the start of the war.
Last week, the store sold a pair of $6,000 sapphire and diamond-studded Gold & Wood sunglasses to a woman in her 40s.
"She walked in, saw them and bought them," Burke said.