In the event that
retailers needed yet another reminder that this holiday season will be
challenging, consumers are happy to oblige. According to NRF’s 2008
Holiday Consumer Intentions and Actions Survey, conducted by
BIGresearch, U.S. consumers plan to spend an average of $832.36 on
holiday-related shopping, up a paltry 1.9 percent over last year’s
$816.69. This represents the lowest increase in planned consumer
spending since the survey began in 2002.
Though shoppers choose to visit stores for different reasons, consumers
say one factor will play the biggest role in buying decisions this
year: price. According to the survey, 40.0 percent of shoppers say that
sales or promotions is the largest factor when determining where to
shop, while another 12.6 percent state that everyday low prices are
most important. Other consumers rated selection (21.5%) and merchandise
quality (13.4%) as the primary factor. Only a handful of consumers said
they are making buying decisions based on a convenient location (5.6%)
or helpful customer service (5.2%) this year.
“Retailers are going into this holiday season with their eyes wide
open, knowing that savings and promotions will be the main incentive
for shoppers,” said NRF President and CEO Tracy Mullin. “No one is
canceling Christmas because money is tight, but consumers will be
sticking to their budgets and looking for good deals when deciding
where to spend this holiday season.”
As in previous years, gift giving is the largest component of shoppers’
budgets. This year, the average person will spend $466.13 on gifts for
family, $94.52 on friends, $26.70 on co-workers, and $43.50 on other
gifts. For the first time in the survey’s history, people say they plan
to spend less on gifts for family members ($466.13 in 2008 vs. $469.14
last year). Spending is expected to be particularly weak among young
adults, as 18-24 year-olds plan to spend $50 less on gifts than one
year ago.
“It might not be easy to pull back on small gifts for a co-worker or a
child’s teacher, but consumers feel like their family understands their
current situation,” said Phil Rist, Vice President of Strategy for
BIGresearch. “Americans might eliminate an extended family gift
exchange or buy one big present for all of the kids to compensate for a
budget-friendly Christmas this year.”
Consumers’ holiday budgets this year also include spending on
decorations ($51.43), greeting cards and postage ($32.43), candy and
food ($95.04) and flowers ($22.61).
While retailers spend the month of October rolling out holiday
merchandise and promotions, consumers are standing by at the ready.
According to the survey, 40.2 percent of consumers will start their
holiday shopping before Halloween. This figure is consistent with
numbers from previous years and demonstrates that bargain hunters are
looking for ways to spread out spending over a period of time.
With sales and promotions the theme of the 2008 holiday season, it’s no
surprise that most consumers (69.7%) plan to do some shopping at
discount stores. Additionally, more than half of American adults plan
to shop at department stores (58.0%), while more than one-third of
shoppers plan to shop at clothing (37.3%) and electronics (37.3%)
stores.
As the Internet becomes more of a mainstay in the retail landscape,
Americans are heading online to compare prices, research retail
locations, and look for gift ideas before heading to stores. Although
the number of people buying gifts online is expected to remain flat
over last year (44.2% in 2008 vs. 44.3% in 2007), shoppers will rely on
the Internet more than ever to browse for holiday gifts and research
products. According to the survey, the Internet will influence 33.6
percent of holiday purchases, up from 30.2 percent last year and 28.9
percent in 2006.
Though most consumers plan to stick to a budget this holiday season,
many are padding it with a little something extra. Knowing that the
holidays often abound with good deals, more than half (56.6%) of
shoppers are planning to make additional non-gift purchases for
themselves or their families this holiday. Some may have even been
holding back on personal purchases for the last few months to take
advantage of holiday pricing. Shoppers will spend an average of $119.83
on these purchases, up from $106.67 last year.
NRF continues to expect holiday sales to increase 2.2 percent to $470.4 billion.
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