RETAIL SHOPPERS ARE shying away from buying expensive gifts and products as the festive season sets in, with retailers saying shoppers are not splurging as the economic slowdown forces them to tighten their belts. Sales are down despite deflation having forced the prices of some luxury products lower compared with last year. Shopping centres launched Christmas sales early this year with discounts from 20 per cent upwards to attract customers. Some retailers have even cut prices by as much as 50 per cent this month. But are consumers taking the bait? Most shoppers said last week they were waiting for further discounts, and were planning to cut Christmas shopping expenses. Hiroyo Shimomura, 35, a trader with a securities company, said she would cut her shopping budget this year. 'I don't mind spending some money in order to create some atmosphere as I still have a job. In fact, I just bought some decorations and gifts,' said Ms Shimomura. 'But I think I would cut down the budget by 10 per cent to 20 per cent. I used to spend HK$5,000 to HK$6,000 every year, but I hope I can cap the budget to less than HK$5,000.' A housewife who wanted only to be known as Repunzel, said she would slash her Christmas budget by 50 per cent. Although she had found prices more attractive than in previous years, she said she would be more cautious when spending money. 'I am not optimistic of the economic environment. I don't want to spend money anyway as I am afraid that my family will lose jobs,' she said. 'I will think carefully before spending the money. 'I will only consider buying things if I am 100 per cent sure that I need them.' Melissa, a translator in a Hong Kong company, also said she would cut her budget for buying gifts. 'I will buy cheaper gifts this year. There are 10 people I need to buy gifts for and I can't ignore anyone. So I think I'll buy cheaper gifts, like instead of spending HK$500 on each gift I am only going to spend HK$300,' she said. Other shoppers said they were willing to spend but said they did not find attractive offers in major department stores. They said big department stores were not offering big discounts, but many smaller boutiques and stores had slashed prices up to 50 per cent and 70 per cent. 'There are not many exciting designs this year, especially in the fashion boutiques for ladies,' said Huang Tsui-er, a visitor from Taiwan, who frequently comes to Hong Kong for shopping. 'At this time, the prices are still expensive. 'Perhaps I'll come back to Hong Kong again nearer to Christmas itself and prices might drop further.' Ms Huang said a Ferragamo handbag was cheaper by about HK$2,000 in Taiwan, though Hong Kong had the latest designs. A visitor from Macau said she did not find anything interesting in a big department store. Ms Chow, a human resources professional who is unemployed, said as she would not expect to get a job before Lunar New Year she would buy cheaper gifts. She said its was possible to get good bargains at shops selling gifts for HK$20 or those offering buy-one, get-one free deals. But an expatriate couple with a two-year-old daughter, who have lived in Hong Kong for 11 years, said they were not cutting back on festive spending. 'Life is too short,' said the husband, while the wife, swinging a newly purchased Gucci bag, said she did not find prices this year any different from last year. Although consumers were keeping their purse strings tightly controlled, retailers such as Body Shop and Crabtree and Evelyn said sales had grown during this festive season against last year's figures. Chu Wai-yan, marketing and communications manager for Body Shop, said the chain enjoyed double-digit growth in customer numbers and sales had increased by 10 per cent compared with last year. 'Although the economy is not doing so good, we think people are more willing to spend money at Christmas to celebrate,' said Ms Chu. Despite increases in sales and customer numbers, many people are opting for the cheaper gift hampers offered by dl/9 tftp-wir Body Shop. Ms Chu said hampers of about HK$100 were the most popular items. Crabtree and Evelyn also has discounted gift sets, ranging from HK$125 to HK$400. Winnie Wu Wing-yee, marketing communications manager for the company, said gift sets ranging from HK100 to HK$200 were the fastest-selling items. 'Sales of the gift sets are high because they come with Christmas decorations and good presentation. Besides, we offer 20 per cent to 30 per cent discount on them,' said Ms Wu. Although profit margins were affected by the discounts, Ms Wu expected the increase in turnover to compensate for the loss in margin. 'Considering the present economic situation, I think the sales of our products are pretty encouraging,' she said. Kit Ko, marketing manager at Mark's & Spencer, said heavy price discounts should not be the main strategy for retailers. 'Consumers are still willing to spend but are more conservative and want value for money. Retailers should offer more new products and varieties for them to choose from,' Mr Ko said. He said many smaller retailers who already were slashing prices from 50 per cent to 70 per cent would be squeezing their profit margins and were unable to sustain the prices. '[Consumers] are not in a hurry to buy cheap things, they want more value for money,' said Mr Ko. He said Mark's & Spencer was offering a wide price range of products to attract different types of buyers. The mid-range goods were among the best-sellers and the food and gifts departments among the most popular during this Christmas season, said Mr Ko.