Companies likely to cut back on employee gifts
New York — Workers shouldn’t count on lavish gift baskets or monogrammed cufflinks from their employers this holiday season.
As companies face tighter budgets and layoffs in a tough U.S. economy, analysts and industry data suggest a slowdown in employee gift-giving. While financial worries have many consumers curtailing their spending, companies are scaling back their budgets as well.
Sherry-Lehmann, a 74-year-old wine and spirits shop in Manhattan, has seen some corporate customers _ mostly law firms, real estate companies, and Wall Street firms _ trade down to cheaper items.
“We’re seeing more interest in less expensive items as the economy struggles,” said Chris Adams, Sherry-Lehmann’s executive vice president.
Adams expects this to continue as the holiday season approaches and more companies start ordering gifts for their employees. He says sales of pricey Champagne have declined, while sales of sparking wine and wines priced between $15 and $30 are rising.
David A. Schick, managing director of equity research for Stifel Nicolaus, says he expects many companies will cut back on ordering gifts for their employees, “based on where budgets are right now.”
A survey by the American Express OPEN Small Business Monitor, which asked 768 businesses nationwide about spending habits, found that the intensifying financial meltdown was leading companies to rethink gifts for their employees. Around 29 percent of businesses surveyed in October said they planned to give gifts to their employees, down from 46 percent in August.
“Business owners are feeling pinched and have held off as long as they could, but they have no choice this year,” said Alice Bredin, small business adviser to American Express OPEN.
