January consumer spending will drop.

U.S. consumers found smaller post-Christmas discounts in stores this year, which could weigh on January spending as many remain worried about their financial situation, a survey showed on Tuesday.

A total of 68.4 percent of consumers surveyed by America’s Research Group said they saw smaller discounts this year than last year after Christmas.

That may have been expected, as retailers ordered less inventory this holiday season to try to avoid the margin-sapping discounts that hammered profits a year earlier when demand failed to materialize.

Meanwhile, 40.1 percent of those surveyed said they felt worse than they did a year ago about their financial situation, which means those smaller discounts may fail to keep shoppers buying well into January, said Britt Beemer, America’s Research Group founder.

“You never want the negative numbers to ever get above 25 percent,” Beemer said. “I just think it is a reflection of how frugal the consumer is and is going to remain in the marketplace,” he said.

http://www.reuters.com/article/idUSTRE60B5IM20100112

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