Shoppers Say Bah, Humbug to Holiday Spending
According to the new Consumer Reports Holiday Shopping Poll, consumers are reducing holiday spending this year. The poll indicates 65% of consumers plan to cut back on overall holiday expenses.
As part of their effort to reduce holiday spending, 78% of consumers are planning to spend less on themselves and 50% are planning to spend less on friends and family members. Interestingly, only 16% of consumers plan to spend less on teachers and pets this year. Consumers may also be planning to cut back on holiday spending by regifting – a practice in which 36% admitted to engaging.
In addition, only 31% of consumers had started holiday shopping before Halloween, and 6% of consumers overall are carrying debt from last year’s holiday season. That percentage jumps to 10% for consumers in households with children less than 12 years old.
The top two most popular items for giving this year are clothing, with 52% of poll respondents planning to give clothing gifts, followed closely by electronics, with 51% of respondents planning to give electronics gifts.
A number of other organizations have released 2009 holiday spending forecasts with results ranging from pessimistic to mildly hopeful. Despite measuring a 15% increase in the percentage of consumers planning to spend less this holiday season, market research firm The NPD Group still predicts a 0.5-1.5% increase in 2009 holiday spending compared to 2008.
The National Retail Federation (NRF) recently released two primarily negative holiday forecasts. According to the Holiday Consumer Intentions and Actions Survey, in 2008, U.S. consumers spent an average of $705.01 on holiday-related shopping. This year, the NRF expects that average figure to drop to $682.74.
The NRF’s negative Holiday Consumer Intentions and Actions Survey follows its recent negative 2009 holiday forecast projecting holiday retail industry sales to decline 1% this year, from $441.97 billion to $437.6 billion.
Other recent holiday forecasts offer mixed predictions for how retail will fare this holiday season. Research firm Deloitte’s 24th Annual Holiday Survey of retail spending and trends indicates gift purchases will drop while other holiday-related purchases will rise. Consumers plan to spend an average of $452 on gifts this year, down 15% from $532 in 2008. However, consumers plan to spend an average of $1,145 on non-gift holiday spending such as socializing away from home and decorations, up 16% from approximately $985 in 2008.
The findings of the Annual Holiday Survey dovetail with 2009 holiday spending predictions made by the Deloitte Retail Group last month. Deloitte expects total 2009 holiday sales to register a 0% change from last year, excluding motor vehicles and gasoline, remaining flat at $810 billion from November 2009 – January 2010. 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.
Meanwhile, the Holiday Forecast from comparison shopping site PriceGrabber.com indicates 53% of consumers expect to spend less on holiday shopping this year than last year. This is an improvement from 2008, when 71% of consumers expected to decrease their annual holiday spending.
And 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.
Retail Forward also expects flat holiday growth in all retail channels except automotive, food, and drug.
In one positive sign for retailers, the most recent American Express Spending and Saving Tracker Update indicates 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.
The Consumer Reports National Research Center conducted a telephone survey of a nationally representative probability sample of telephone households. One thousand interviews were completed among adults aged 18-plus from October 15-18, 2009. The margin of error is plus or minus three percentage points at a 95% confidence level.