Since the worst recession since the Great Depression began at the end of 2007, Americans have kept their hands on their wallets, sending sales plummeting and giving the Grinch a run for his money.
Archstone Consulting says all that's about to change. In a holiday shopping report to be published Monday, Archstone predicts 1.5 percent growth. That compares to only 0.4 percent last year and a 3.9 percent drop in 2008.
And Archstone is not alone. IBISWorld Inc. is forecasting a 1.8 percent uptick in all holiday sales, which account for 20 percent of annual retail sales, and the National Retail Federation is predicting a 2.3 percent jump.
The season officially kicks off with Black Friday, Nov. 26, although retailers promoted pre-holiday shopping with such gimmicks as Christmas in July and a throwback to days of yore with layaway plans.
"With slow growth in the U.S. economy, high unemployment, tight credit and foreclosure-related stress in many parts of the country, we do not anticipate a record beating Black Friday," said Dave Sievers, strategy and operations practice leader for Archstone Consulting, a division of The Hackett Group.
"This recession has certainly changed shopping and consumer patterns … Retailers and manufacturers alike are actively changing strategies and tactics to react to those changes."
Sievers predicted shoppers will be looking for bargains yet again, with many putting luxury items back on their wish lists. At the same time, shoppers are sticking more closely to their shopping lists, eschewing impulse buys and still delaying large purchases.
"It may, however, be premature to suggest that the depression era mentality of our grandparents is back. The recent increase in luxury spending suggests the indulgent shopper is still very much alive," Sievers said.
Credit remains a problem. Total consumer loans and credit cards were off 2 percent from last year as of August and interest rates on credit cards are nearly a point-and-a-half higher than last year. Consumer confidence is still falling as home foreclosures are once again increasing.
Sievers said retailers may be shooting themselves in the foot with all the early Christmas marketing.
"Aggressive promotions can increase sales for the retailer driving the promotion. However, it also shifts sales from later in the season to earlier in the season and from one retailer to another," he said. "Unfortunately, it becomes a race for many retailers to grab share early, which in the aggregate across the sector may not be the most effective use of promotions, particularly when Christmas competes aggressively with Halloween."
So what will consumers be looking for? Clothing and toys will top shopping lists, NPD Group predicted.
Fragrance- and flavor-maker Arlylessence has another take: The company's TrendWatch found Americans are looking for sensuous and emotional experiences.
"People are demanding the best quality, multiple benefits, maximum performance and less waste from products that cost less, including private label brands -- but they also want exotic, super-ingredients like acai, lulo and acerola; natural, soothing products that nurture and protect; and stimulating foods and flavors they have never tasted before; all sourced in sustainable, earth-friendly ways," Marketing Director Lori Miller Burns said.
The report also found nostalgia is back in style, with renewed interest in vintage classics and old-world aristocracy.
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