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CNN Today

Consumer Confidence Tumbles During Holiday Season

Aired December 22, 2000 - 2:04 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOIE CHEN, CNN ANCHOR: The push is on to get shoppers into the stores and through them this weekend. So whether you are buying gifts for Christmas, Hanukkah or Kwanzaa, you can probably find some really great deals. Retailers hope deep discounts will prop up some lackluster holiday sales.

CNN's Brian Cabell is in Atlanta, where the Kmart is open 24 hours a day to woo shoppers.

Kmart 24 hours a day, Brian, wow -- it's not a vision I want to imagine.

BRIAN CABELL, CNN CORRESPONDENT: Can't beat that, Joie; you can't beat that.

You know, back in Thanksgiving, American retailers were pretty excited because, No. 1, they had what looked like a pretty strong American economy; and No. 2, they had five full weekends between Thanksgiving and Christmas -- that's unusual.

So they had reason to believe it was going to be a pretty strong Christmas. Well, it hasn't quite worked out that way. As a matter of fact, it's been kind of sluggish for the most part. It's been a little bit slow at times. A number of segments, in fact, have been very slow: jewelry has been very slow; expensive electronics items also very slow. Clothing not bad at all, we're told. E-commerce -- that was the hot sector last year -- this year we're told, well, it's not great, but it's not all that bad.

(BEGIN VIDEO CLIP)

DONALD RATAJZAK, ECONOMIST: Well the e-commerce, it's one of these things that, if you hadn't expected great things you would probably be satisfied with what's going on, although they show the same trends. We started the weekend after Thanksgiving, sales up 50 percent, and then it was 40, and then 31, and then 20. And we don't know yet what this last weekend is going to be. But the sales definitely have slowed their rate of growth.

(END VIDEO CLIP)

CABELL: Now, the 2,100 Kmart stores across the nation, they have not had the best of Christmas retail seasons yet. That's why they are open for 86 hours straight. They started on Thursday morning; they'll finish up Sunday night at 8:00 p.m. They're hoping to boost sales; they were hoping for growth of 2 to 4 percent; it's going to be a bit of a struggle for them, as well.

I'm Brian Cabell, CNN, live in Atlanta.

NATALIE ALLEN, CNN ANCHOR: All right, Brian, thanks.

Retailers may not be ready to give the holiday season over to the Grinch, but some consumers are. New numbers today show spending is slowing down a bit.

Ceci Rodgers of CNN financial news is in Chicago with the latest about that -- Ceci.

CECI RODGERS, CNN CORRESPONDENT: Hi, Natalie.

Well, consumer confidence took it's largest -- fourth largest tumble on record in December. That, as reported today by the University of Michigan in its consumer sentiment survey.

The sudden mood swing, of course, is having a big impact on the economy and on retailers during the height of the holiday spending season. Last year retailers were gloating over a more than 7 percent increase in holiday sales. But that's, of course, when Americans were feeling pretty exuberant. So what has happened to send consumers into this gloom and doom?

(BEGIN VIDEO CLIP)

TRACY MULLIN, PRESIDENT, NATIONAL RETAIL FEDERATION: We've been faced with six increases -- six interest rate increases in one year, rising gasoline prices, a volatile stock market, disappointing corporate earnings reports, and a starkly close presidential election, bad weather in many major markets across the country. And oh, yes, the use of the dreaded "R" word, that we've heard on the lips of a number of policy-makers over the last couple of weeks. No wonder holiday shopping has gotten off to a very slow start.

(END VIDEO CLIP)

RODGERS: And, though most economists are not, at this point, forecasting an actual recession, the number of consumers who expect one are growing by the day -- Natalie.

ALLEN: OK, we'll try to remain optimistic here for now. Thanks; Ceci Rodgers in Chicago.

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