http://www.nytimes.com/2014/10/14/business/household-finances-may-curb-holiday-spending.html 2014-10-14 02:46:14 Household Finances May Curb Holiday Spending Competition for shoppers’ dollars include health care and child care, personal savings, and even the new iPhone 6. === It’s going to be a frenetic holiday sales season. Kmart has already begun its Across the country, retailers like Macy’s and Walmart are adding a projected 800,000 holiday workers to their ranks, their highest level of seasonal hiring since 1999, according to the outplacement firm But forecasters warn that businesses could ultimately struggle to persuade households to spend more this holiday season. PricewaterhouseCoopers projects Households that earn less than $50,000 annually are expected to spend an average of $377 on holiday shopping, compared with $978 for households that earn more than $50,000, according to the report, based on a survey of 2,200 American consumers. In a survey to be published this week by the personal finance website The National Retail Federation is more upbeat, saying it “The vast majority of the country is finding they need to buy less stuff, or go down-market,” said Joseph Nathan Cohen, assistant professor of sociology at the City University of New York, who studies household spending patterns. “There’s pressure to spend on the holidays, but so many people are still so tight on cash.” Experts say the holiday shopping season will be marked by dogged bargain-hunting. Shoppers appear ready to go to lengths — trawling online, visiting multiple stores — to find deals that will stretch their dollars. For Helen Brezinski, 65, an administrative assistant at a New York commercial real estate firm, holiday shopping this year will focus on the dollar store. She started hunting for gifts for her three granddaughters this week at Toys “R” Us. She also checked for gifts online and at Jack’s World, a Manhattan dollar store that promotes heavy discounts. There, she found jewelry craft kits from Crayola for $10, compared with about $25 at “In today’s market, you have to shop around,” said Ms. Brezinski, who said the rising costs of living in New York were weighing on her spending. “Deals like this each week, and you have a good Christmas tree.” Not that bigger retailers are not doing their best to loosen consumers’ purse strings. Walmart is offering to match the lowest price for any toy on its But retailers are competing against many other rising costs that the American middle class is dealing with. Apartment rents have risen across the country for 23 straight quarters, according to A new focus on practical spending, shaped by years of economic uncertainty, is also directing money toward big-ticket items like cars and homes, at the expense of stocking fillers, a recent The new iPhone 6, released just ahead of the Christmas season, could also take as much as $14 billion in retail sales by the year’s end — dollars that could otherwise have been spent on holiday gifts, according to economists at Wells Fargo Securities. “We know that Samsung, Apple and Amazon are taking a big chunk out of consumer spending,” Myron E. Ullman III, the chief executive of J. C. Penney, said at an analyst conference last Wednesday. The weaker spending is giving retailers thinner margins, prompting them to cut wages and benefits for workers, which contributes to stagnating wages, experts say. Retailers are increasingly locked in a war of attrition, they say, chasing volume with big discounts and trying to win market share from one another at the expense of margins and profits. A new study published Monday by the Center for American Progress underscores how big a threat the nation’s biggest retailers see in weak consumer spending and stagnating incomes. The study, which analyzed financial statements filed by the nation’s top 100 retailers, found that 68 percent cited falling or flat incomes as risks, double the percentage in 2006. Eighty-eight percent cited weak consumer spending as a risk to their share prices. “A lot of the items you buy during the holiday season are discretionary, and that’s what people cut back the most,” said Brendan V. Duke, a policy analyst at the center and the report’s lead author. “It’s simple. If incomes don’t rise, retail spending isn’t going to rise.”