Consumers, economy crimp U.S. retail store plans

By Nicole Maestri

NEW YORK (Reuters) - The consumer spending slowdown that began in 2007 is turning into a new store slowdown in 2008.

As many U.S. retail chains prepare to end their fiscal year on Thursday, they are already ratcheting back expansion plans for their next fiscal year, realizing the rocky economy and a cash-strapped consumer will no longer support heady store opening plans.

On Wednesday, Starbucks Corp (SBUX.O: Quote, Profile, Research, Stock Buzz) said it would close 100 underperforming U.S. stores and slow domestic openings in the face of a likely consumer recession, while AnnTaylor Stores Corp (ANN.N: Quote, Profile, Research, Stock Buzz) said it would close 117 stores and also delay until next year the launch of its new store concept.

On Thursday, department store operator J.C. Penney Co Inc (JCP.N: Quote, Profile, Research, Stock Buzz) joined the chorus, saying it might cut 10 or more of the 50 stores it planned to open each year in 2008 and 2009.

"In 2008, we're planning more conservatively," J.C. Penney spokeswoman Darcie Brossart said.

Conservative may be the name of the game for retailers in 2008. As the housing market boom propped up consumer spending, retailers rushed to boost store opening plans or introduce offshoot brands to take advantage of flush shoppers.

But the deteriorating housing market of the past year has put a chill on consumer sentiment and spending. U.S. holiday sales rose at their slowest in five years and 2008 retail sales are forecast to increase at their lowest level in six years, according to the National Retail Federation.

Meanwhile, the Commerce Department said on Thursday that consumer spending edged up by just 0.2 percent in December, which is supposed to be a busy holiday shopping month, after a 1 percent gain in November.