WHY AMERICANS ARE BUYING LESS

ANGERED by rising prices and fearful of future economic tremors, U.S. consumers have turned cautious in their buying habits. They are shopping harder for bargains, postponing some planned purchases of costly items and hesitating about buying on credit. "We see a marked change over the past four weeks," says Ernest Molloy, president of Macy's, echoing a common sentiment among merchants. Caught in a pincers, they feel squeezed both by the rising costs of doing business and by mounting consumer resistance.

The new mood—welcome to Washington's inflation fighters but a source of concern to many businessmen—has been building up for months. The trend of retail sales has been flat almost all year. During the twelve months that ended last July, sales rose less than 2% while prices advanced nearly 4%, meaning that the actual volume of retail trade shrank about 2%. Though retail sales climbed above last year's levels during the latest week reported by the Commerce Department, most of the increase reflected the early introduction of 1970 auto models (see story, p. 93).

Rising Rebellion. Last week TIME correspondents in a dozen cities interviewed 50 large and small retailers—and many of their customers—about the rising rebellion against high prices. Smaller retailers have been complaining for months, while big department stores and chain stores continued to do quite well. Now that pattern may be changing as consumers tighten their purse strings.

"Business is harder to come by," says Saul Zeidman, vice president of Allied Stores. Accordingly, many merchants and manufacturers are revising their advertising to emphasize sound value and cost-savings. For example, Coca-Cola is promoting its 16-oz.-bottle package as the "best buy per ounce" in soft drinks, and Westinghouse Electric stresses "the most refrigerator for your money."

Consumer resistance shows up most sharply in home furnishings and appliances. "We went to four different places before we finally bought a color TV set," says Norma Piel, a Pittsburgh housewife, "and I'm sure that we saved at least $100." Apparel sales are strong almost everywhere, but stores in Los Angeles and St. Louis report a declining demand for shoes, partly because the new styles, which many people consider ugly, have not really caught on. The fur industry is having its shabbiest year in decades; women are not buying as many minks and Persian lambs as in recent years. In Boston, Detroit and other cities, retailers express misgivings about the prospects for Christmas sales; some are trimming their holiday orders.

The resistance movement has spread far and wide. The Pentagon has just announced that it will stop serving beef stew in military mess halls next year because it costs too much to prepare. Instead, troops will get more hamburger or meatballs (which they prefer anyway). In another move prompted by price increases, President Nixon last week asked Congress to raise social security benefits by 10% and to provide for automatic increases in the future geared to the cost of living.