WASHINGTON -- LaTonya Story is every retailer's worst fear.
With the viral pandemic resurging through the country and the economy under threat, Story has decided to slash her holiday shopping budget. She'll spend less than $2,000 this season, down from several thousand in 2019. Worried about entering stores, she's buying gifts online and going out only for groceries.
"I want to be conservative," said Story, a 47-year-old Atlanta resident. "I'm not a scientist, but the best precaution is to stay in place."
The acceleration of coronavirus cases is causing an existential crisis for America's retailers and spooking their customers just as the critically important holiday shopping season nears. It's also raising the risk that the economy could slide into a double-dip recession this winter as states and cities reimpose restrictions on businesses and consumers stay home to avoid contracting the disease.
An anxious consumer is a frightening prospect for retailers as well as for the overall economy. Any sustained recovery from the pandemic recession hinges on consumers, whose spending fuels about 70% of economic growth.
So as the virus rampages across the nation and with holiday sales expected to be weak and heavily dependent on online shopping, retailers are considering extraordinary steps to draw customers.
Some, like Giftery, a small shop in Nashville, Tenn., are adopting their own safety restrictions. To reduce respiratory particles that could spread the virus, Giftery is asking shoppers to refrain from talking on cellphones.
"It is vital for us to stay open," said William Smithson, the owner of Giftery, which generates about 35% of its annual sales from the holiday season.
At the same time, some high-end retailers are giving customers extra coddling. Neiman Marcus is letting shoppers book appointments to take virtual tours of its holiday trees and other decorations if they're too fearful to enter a store. In doing so, the retailer hopes its customers will get into the spirit of buying gifts.
"Business restrictions are increasing, and there will be some economic fallout from that," said Jim O'Sullivan, an economist at TD Securities. But "even without authorities announcing new restrictions, individuals are likely to pull back from activity on their own."
O'Sullivan predicts that the economy won't grow at all in the final three months of the year and will shrink 2% in the first three months of 2021. He, like most economists, expects a rebound starting in the second quarter once a vaccine is widely distributed.
O'Sullivan's forecasts assume that Congress will agree on roughly $1 trillion in new stimulus for the economy by early 2021. Yet so far, there's no sign of progress toward an agreement. And more than 9 million people will lose their unemployment aid at year's end, when two jobless-aid programs are set to expire, unless Congress extends them.
As Story, the Atlanta consumer, and other Americans cut back and as colder weather ends outdoor dining in much of the country, consumer spending is likely to weaken and hiring to slow. Layoffs could rise.
Small businesses are particularly worried about being forced to shut down again.
"If we close, it will be a devastation," said Paulette Garafalo, CEO of Paul Stuart, a high-end clothing retailer that operates five stores in Chicago, New York and Washington, D.C.
Garafalo doesn't envision a boost from the holiday season; she just hopes sales won't fall. Her stores have called in their most seasoned salespeople to alert customers to new merchandise and are aggressively marketing a gift guide.
Likewise, Elonka Perez, who co-owns two restaurants in Washington state, says she's "scared out of my mind" after Gov. Jay Inslee banned indoor dining again. Perez doesn't know if her Taco Street restaurant in Seattle will earn enough money from takeout to survive colder weather.
"Winter is typically the slowest time for restaurants," Perez said. She and her husband have been pouring their savings into the business, and they don't know how long that can continue.
Macy's, long an iconic symbol of the holiday shopping season, had to close its store in El Paso, Texas, because of a viral surge. The chain is studying how the surge is affecting shoppers' willingness to enter its stores. In the meantime, Macy's has sped up its checkout service for curbside delivery.
Other chains, particularly Target and Walmart, have benefited from changing habits. Customers are increasingly spending more when they visit the two chains, because they can combine shopping trips and buy food, clothes and other household goods at a single location. That additional spending has come at the expense of small and independent stores.
For many consumers, the pandemic has transformed what shopping means. Alyse November, a licensed social worker in Boca Raton, Fla., has noticed the change.
Information for this article was contributed by Joyce M. Rosenberg of The Associated Press.