Consumers return to malls, but spending not back to normal in aftermath of terrorist attacks

Monday, September 17th 2001, 12:00 am

By: News On 6

NEW YORK (AP)_ After avoiding shopping centers all week after Tuesday's terrorist attacks, American consumers broke away from their television sets and headed back to stores over the weekend. But their respite from the blanket media coverage of the event brought little comfort to merchants.

Not wanting to indulge themselves when the nation is in mourning, shoppers spent mainly on basics and patriotic items like flags and New York memorabilia and refrained from discretionary items like apparel, computers and DVD players.

That left merchants, already stung by a softening economy, with weaker sales from the previous weekend, though not as bad as feared.

The biggest exception was, predictably, New York, where residents are still shellshocked over the devastation of the financial district and a death toll that could top 5,000. Also hard hit were major cities like Atlanta and Los Angeles, where analysts said consumers are jittery about the threat of terrorist attacks in their own backyard.

``I don't think people are going to go back to shopping for some time. They will buy what they need to buy, and not buy a lot of extras,'' said John Konarski, a retail consultant.

``I don't see much shopping to make consumers feel better,'' said C. Britt Beemer, chairman of Charleston, S.C.-based America's Research Group, which surveyed 5,000 consumers and 65 national retailers over the weekend. ``Consumers are stunned, and it is going to take them a few weeks to get back to normal.''

Beemer estimated that sales this weekend were down by 50 percent in New York and anywhere from 30 percent to 50 percent in other large cities like Atlanta and Los Angeles. Merchants in smaller cities saw declines of 20 percent, he said.

The big question, he said, is how military action plays out and the impact on already-shaky consumer confidence.

Steady spending by consumers has been one of the weakening economy's few supports in recent months. But with Americans showing increasing signs of nervousness, a blow to their confidence from the attacks on the Pentagon and World Trade Center could undermine chances for an economic rebound.

That couldn't happen at a worse time for retailer executives, who see September as a kickoff point for holiday spending.

Kurt Barnard, president of Retail Trend Report, based in Montclair, N.J., said holiday sales, forecast to be up only a modest 2.5 percent to 3 percent, could now be down from last year.

Barnard said he spoke privately with mall owners and top merchants over the weekend and ``the sheer horror hasn't fully set in, and it isn't going to go away.''

But he cautioned, ``Lots of things could change holiday prospects for the worse _ and for the better.'' A quick resolution to the terrorist crisis could help bolster the economy and consumer confidence, he said.

Meanwhile, shoppers in New York were still trying to grapple with the devastation of their city. Major stores like Saks Fifth Avenue and Lord & Taylor took away merchandise from their windows, replacing it with simple flowers or flags, and words of condolences.

Jennifer Fessler came into the city with her husband to walk around with her father. She had just bought a $5 flag from a street vendor.

``Honestly, we can't even think about shopping. I feel depressed,'' the Upper Saddle River, N.J., woman said.