Retailer Daily

PriceGrabber Holiday Forecast Shows Mild Optimism

According to a new study [pdf] from online comparison shopping site PriceGrabber.com, more than half of consumers are planning to cut back on holiday spending this year, but a significantly higher percentage planned to cut back last year. The PriceGrabber.com Holiday Forecast indicates that 53% of consumers expect to spend less on holiday shopping this year than last year. In 2008, 71% of consumers expected to decrease their annual holiday spending. Part of this decrease is driven by expectations among many consumers to purchase gifts for fewer people. Twenty-nine percent of consumers plan to purchase holiday gifts for fewer people this year, compared to 10% in 2008. In addition, 53% of consumers will purchase gifts for some or all of the co-workers they purchased gifts for last year, while 44% of consumers will purchase gifts for some or all of the service providers they purchased gifts for last year. In a positive sign for retailers, more than half of consumers plan to or already have started their holiday shopping before the traditional Thanksgiving start of the holiday season. Twenty-two percent of respondents plan to start in October, and another 30% plan to start in November. Retailers with an online presence and discounters stand to benefit from consumer price sensitivity this holiday season. Seventy percent of consumers plan to save money by performing research and comparison shopping online this year, compared to 38% last year; while 50% plan to shop at discount/outlet stores, compared to 43% last year. In terms of total holiday spend, most consumers expect to spend less than $1,000 in holiday shopping this year. The largest segment of consumers, 36%, expect to spend $100-$499. Another 28% plan to spend $500-$999, while 6% expect to spend $0-$99. Thirty percent expect to spend more than $1,000. Other recent holiday spending forecasts largely echo PriceGrabber’s prediction for a mediocre but not awful 2009 retail holiday season. The National Retail Federation (NRF) predicts a 1% decline in holiday sales this year, an improvement from last year’s 3.4% drop. According to a recent survey from The Nielsen Company, the 2009 holiday season should deliver virtually flatsales results. The survey indicates 44% of consumer households will spend the same on the 2009 holidays as they did in 2008, with 42% planning to spend less and only 4% planning to spend more. Two other recent research reports also predict flat holiday sales performance this year. Retail Forward expects flat holiday growth in all retail channels except automotive, food, and drug. In addition, research firm Deloitte is also predicting flat holiday sales this year. Deloitte’s 2009 holiday forecastexpects total 2009 holiday sales to register a 0% change, excluding motor vehicles and gasoline, from last year. This would be an improvement from what Deloitte tracked as last season's 2.4% decrease, the first decline in holiday sales according to Deloitte's analysis of Commerce Department data dating back to 1967. The most recent American Express Spending and Saving Tracker Update reinforces PriceGrabber’s predictions for many consumers starting their holiday shopping early. According to the update, 80% of overall respondents intend to make end-of-year holiday gift purchases, with 22% planning to start in October, 30% planning to start in November and 28% planning to start in December.