CUTTING BACK

Experts are saying gun-shy Americans underspent their way through the most dismal holiday season since the Nixon administration. And people like the Brennans of Conshohocken help explain the mind-set behind the malaise.

Anita and David Brennan yesterday dropped off a camera for warranty service at the Conshohocken outpost of Circuit City, a bankrupt electronics chain that, not long ago, was a dominant player.

Across the street was the carcass of another electronics chain: Tweeter Home Entertainment, whose bankrupt stores closed in December as the recession produced what the International Council of Shopping Centers now calls the worst holiday shopping season since 1970.

Rattled by unemployment and the economic willies, the Brennans cut their holiday budget by two-thirds, spending $700 instead of the usual $2,000 for family and friends.

"I'm not working right now," said Anita Brennan, 29, laid off nine weeks ago from a temporary job at St. Charles Borromeo Seminary.

There were fewer presents under the tree. And what gifts the family did exchange were bought with cash or cheap financing, such as CDs and video games on a 90-day interest-free Circuit City credit card.

"We took shortcuts," said David Brennan, 39, a statistical analyst, "to get more with less."

Instead of buying gifts for extended family and friends, Anita Brennan made cookies and recipe cards. "Creative presents," her husband said. The kids, Jeremy, 6, and Alexandra, 2, got less, too.

Economists and retail experts say such frugality by consumers, whose spending for years has accounted for about two-thirds of U.S. economic activity, will lead to more bankruptcies, vacant stores and unemployment in the new year.

The shopping-center trade group ISCS predicts a drop in holiday sales of up to 2 percent. Its forecast already is being borne out by data showing a 1.8 percent decline in consumer activity the week of Christmas compared to the same week in 2007.

Online holiday sales also tumbled, 3 percent between Nov. 1 and Dec. 23, according to e-commerce tracking group comScore, which had predicted flat sales.

"This marks the first time we've seen negative growth rates for the holiday season since we began tracking e-commerce in 2001," comScore chairman Gian Fulgoni said in releasing the data this week.

Consumers got their first taste of spending shock a year ago as gas prices were skyrocketing and mortgage defaults were taking hold.

As a result, holiday sales increased last year, but by lower levels than anyone had seen in years. This year's decline is an even steeper departure from the spendthrift ways of the last decade.

When the stock market crashed in mid-September, wiping out wealth with wildfire speed, consumer confidence began to plunge. In December, it reached its lowest level since 1967, according to the Conference Board.

Matt Leahy, 44, of Merion, said he started to get the jitters as mass layoffs this fall began to swell the nation's jobless ranks.

"I started to get nervous a month ago," said Leahy, a management consultant, who comparison-shopped for days before pulling the trigger yesterday on a TV and home-entertainment system from Circuit City. "The unemployment numbers, that scared me more than anything."

The only gifts the Behr family of Lafayette Hill traded this year were "necessities." In other words, clothes instead of expensive toys or video games. The five-member family's planned cell-phone upgrade, to replace three-year-old units, counted as a gift swap.

"We purchased more usable items this year instead of play items," said Jim Behr, 49, who dashed into Plymouth Meeting Mall yesterday with his daughter Mary, 19, a sophomore at LaSalle University, where he works on the facility's staff.

"I think that my wife and I have good jobs, but it's tough out there," said Behr, whose wife is a Whitemarsh Township police officer. He knows four people who have been laid off in recent months.

Carol Moffatt, 62, of Fort Washington, bought a $110 dress from the Plymouth Meeting Boscov's yesterday for just $27.50 - "that was strictly impulse!" she said.

She landed the bargain at a department store chain that itself emerged from bankruptcy only weeks ago.

Moffatt has watched nervously as the economy has emptied storefronts near the Hallmark store that she and her daughter bought this spring in Dresher.

Business at their card shop at Dreshertown Shopping Plaza on Limekiln Pike remained relatively steady, she said, though it has been unnerving to see an ice cream store, a photo shop and a Chinese restaurant disappear.

"We hope that they do get filled," Moffatt said.