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EU Retailers Brace for Holiday Austerity

European retailers had expected austerity after Christmas this year, but consumer confidence in the EU sank to a 42-month low in November, worrying retailers who depend on holiday shoppers for their annual profits.

Deloitte, a business advisory firm, predicted that holiday spending–on presents, food and drink, and entertainment–will fall 16.2% in Greece, 13.5% in Portugal, 3.9% in Spain, and 3.7% in Italy, thanks to austerity measured sparked by budget deficits. Spending in some EU countries is predicted to rise, but in less dramatic numbers–7% in Germany, 4.1% in Switzerland, and 0.7% in France.

Fashion retailers have turned to slashing prices to lure in holiday shoppers, but specialty stores, faced with tough online competition, are bracing for a hard hit. Big profits are predicted for internet retailers, who boast convenience, efficiency and competitive prices to shoppers pressed for money and time; as budget-conscious shoppers cook at home, rather than dining out, supermarkets are also expected to see improved sales.