Consumers let cash flow, just a bit
Election sways plans for holiday spending
CAMBRIDGE - Belo Makhene got up this morning feeling "awesome" following the election of Barack Obama as president and decided to celebrate - at the mall.
So, the 23-year-old Medford resident headed to Best Buy at CambridgeSide Galleria, where he bought a $13.99 CD by rap star Young Jeezy titled "The Recession." The CD, which makes a reference to Obama in "My President," is inspirational, he said. And it was the first discretionary purchase Makhene had made in months.
"I have been feeling a victim of the economy and can't go out and buy what I want to buy," said Makhene, the son of an American mother and a father from South Africa. "But today I'm feeling better about the future and am shopping for some music to celebrate."
Makhene was one of many consumers out yesterday at CambridgeSide Galleria, Downtown Crossing, and malls across the region who, after months of austerity, were cautiously opening their wallets.
One nationwide study showed that the outcome of the election is the second most important factor - after the cost of living - in influencing how much consumers will spend during the holiday season. Eight percent of households reported a likely lift to spending in the event of an Obama victory, and 5 percent said they'd open the coffers if John McCain won, according to the survey of 1,000 consumers between Oct. 30 and Nov. 1 commissioned by the International Council of Shopping Centers and Goldman Sachs.
"If consumers do as they say, this would help increase holiday spending marginally," said Michael P. Niemira, chief economist at the International Council of Shopping Centers.
Still, other economic pressures, such as huge debts, rising mortgage payments, job losses, and limits on credit cards, will continue to squeeze shoppers. And news yesterday that the Dow dropped 5 percent, reversing Tuesday's 300-point rally, risked further dampening consumers' long-term outlook.
Indeed, the immediate effect of the election may be more psychological, providing beleaguered consumers with a shot of confidence. "I'm hopeful again with Obama," said Cindy Rubinski, 32, from Malden, while shopping for a present for her son at KB Toys at the Galleria. "But I'm still cutting back. My kids usually get a big birthday party, and this year, we'll have a smaller one at home. But I think things will get better next year."
For Shari Goldberg, a self-diagnosed "shopaholic," the election results are an addiction enabler. Goldberg visits her husband in Boston once a week from Canton, and typically shops during her trips. That changed amidst the economic downturn when her husband's stocks took a hit, and Goldberg hasn't shopped for six months. But Obama's victory reinvigorated her sense that happy days are here again.
Yesterday, she bought two outfits and bibs at Macy's in Downtown Crossing for a friend's baby boy. "I could finally get some nicer things for her," Goldberg said.
Meanwhile, merchants are reporting monthly sales today and analysts expect one of the worst Octobers in years. And many retailers still are bracing for the worst Christmas in decades, Niemira said.
To lure consumers, some shops have stepped up promotions. At the Galleria, KB Toys offered $10 in bonus bucks for purchases of $30 or more; American Eagle featured a buy one sweater, get one 50 percent off deal; and Pacific Sunwear boasted 50 percent markdowns.
Helen Kainamisis, 52, of Cambridge took advantage of sales at Macy's and purchased a $40 sweater as a Christmas present for her son and a $30 pair of jeans for herself.
"I haven't bought jeans in a year, and my coat is 10 years old," Kainamisis said. "It's hard to make the bills with increased food costs and heating bills. But after this election, I'm feeling it's going to get better."
In recent months, business at The Front Man jewelry counter in Downtown Crossing hasn't just been slow - it's been "dead," according to co-owner Sharlene Johnson. Johnson leaned over a display case of $2,000 watches and $1,500 rings. But she has complete confidence that an Obama administration could improve business.
"We've already had more than usual today," Johnson said. "A few customers - that's a start."
Jenn Abelson can be reached at abelson@globe.com. 