U.S. households are expected to spend an average of $390 on Christmas gifts this holiday season, down from last year’s estimate of $418, The Conference Board reports today.
The survey of Christmas gift spending intentions covers a nationally representative sample of 5,000 U.S. households. It was conducted for The Conference Board in November by TNS, the world’s largest custom research company.
„Consumers are approaching the holiday season very cautiously,” says Lynn Franco, Director of The Conference Board Consumer Research Center. „Job losses and uncertainty about the future are making for a very frugal shopper. Retailers will need to be quite creative to entice consumers to spend, both in stores and online this holiday season, as consumers most certainly will expect major markdowns and bargains.”
AP-GfK Poll: Debt Turning Shoppers into Scrooges (Associated Press)
A lot more Americans are feeling stressed out by debt this holiday season, raising the glum likelihood they’ll behave like Scrooge rather than Santa.
In fact, fully 93 percent say they’ll spend less or about the same as last year, according to an Associated Press-GfK poll. Half of all those polled say they’re suffering at least some debt-related stress, and 22 percent say they’re feeling it greatly or quite a bit. That second figure is up from 17 percent just last spring, despite all the talk about economic recovery.
Most people — 80 percent — say they’ll use mostly cash to pay for their holiday shopping, and that generally means buying less.
U.S. consumers are expected to spend $437.6 billion in the November and December period, a 1% drop from $442 billion last year, according to the National Retail Federation. Six out of 10 consumers (61%) said they would only buy goods „on sale,” a survey by NPD Group found.
Survey Shows Consumers Intend to Spend Less on Credit This Holiday Season(Credit Union Times)
A survey of consumers who visited its Web site indicated that many intend to put less on credit cards for holiday celebrations this year, according to the National Federation of Credit Counselors.
What might be the driving factor that lowers holiday retail sales and stalls a much-anticipated economic recovery? Stingy spouses with children. According to a new survey from America’s Research Group, a retail-consulting firm, 50.1% of parents plan on cutting back on gifts to each other this year. That figure is up from 44.4% last year, a surprising jump considering that the U.S. was in the depths of the financial crisis during the previous holiday season. „Parents want to maintain gift-spending levels for their kids, so they are showing more willingness to trim on each other,” says Britt Beemer, founder and chairman of America’s Research Group.
In 2007, only 6% of spouses said they would cut back on gifts for each other, so in just two years the number of spendthrift spouses has increased almost nine-fold. „This holiday season, parents are telling us that they still worry about job security, and they are desperately trying to cut down on debts,” says Beemer. Even the pooch may be getting better treatment than Pops. In a separate Consumer Reports survey, 22% of women who expected to reduce their holiday spending said they would be cutting back on gifts for their spouse. Only 14% said they would cut back on gifts for their pets. Ruff.
Thanks in part to these forecasted cuts in spouse-to-spouse gifting, Beemer is predicting a 2.9% drop in holiday retail sales, compared with a 2.7% drop a year ago. „I know some analysts are predicting positive numbers, but I just don’t see it working out as well,” he says. Given his track record — Beemer’s sales predictions have been accurate within a half of 1% over the past 17 of 18 holiday seasons — the economy shouldn’t expect a Christmas gift. „It’s a heck of a challenging time,” says Mark Israel, president of Hearts on Fire, a high-end jewelry maker, „and we have to respond.” Israel says Hearts on Fire will sell more products than usual below the $3,000 price point.
According to Beemer’s research, 51.5% of consumers plan to spend less this year, compared with 40.1% who said they’d cut back a year ago. Retailers have been quick to trumpet how their more manageable inventory levels and smaller staffs will help control costs. But such cuts could backfire against them. Over 41% of shoppers, as opposed to 21% in 2008, say they will leave stores that are short-handed or have long lines at the register. If cash-strapped customers already feel a little guilty about shopping to begin with, they’ll look for any excuse to head home.
Americans’ estimate of the total amount they will spend on Christmas gifts this year has fallen precipitously over the past month, sending the figure back to last year’s record lows. Americans’ average Christmas spending prediction is now $638. This nearly matches the $616 recorded in November 2008, amid one of the worst holiday retail seasons in recent memory.
The latest result is Gallup’s second holiday spending forecast for 2009, based on a Nov. 5-8 national survey. Last month, Americans predicted they would spend $740 on gifts, a figure that offered more hope for holiday retailers.
Americans’ current spending prediction is roughly the same as it was last year at this time (and is nearly identical to the $639 recorded in December 2008), and, indeed, the majority (57%) now say they will spend the same amount on gifts as they did last Christmas. Further indicating that last year’s stunning 3.4% drop in holiday retail spending is not likely to be repeated, fewer Americans explicitly say they will be spending less on gifts this year — now 34%, down from 46% in 2008.
Still, the 34% who today say they will spend less is higher than at any other time in the recent past, prior to 2008. Also, as in 2008, few Americans today (now 8%) say they will be spending more than they did a year ago.
Discover Survey: Gloomy Consumers Plan Holiday Spending Cuts (Wall Street Journal)
Despite signs that a U.S. recovery began this summer, consumers are planning to spend less this holiday season amid worries of a worsening economy and personal finances, according to a survey of consumers done by credit-card issuer Discover Financial Services….
The survey showed almost 63% plan to spend less on holiday gifts this year compared with last year, which was one of the worst holiday shopping seasons on record.
„The decline in economic and financial confidence was greatest among women, which may be a concern for retailers heading into the holiday shopping season,” said the report.
Consumers plan to spend more during the holidays this year than during the depths of the recession a year ago, but their spending is still expected to be more restrained than in prior years, according to the tenth annual holiday spending survey conducted by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA).
This year 43% of consumers said they intend to cut back their holiday spending, compared to 55% last year. But the 43% figure is still much higher than in the previous eight years of 2000 to 2007, a period when the percentage intending to spend less never exceeded 35% and dipped as low as 21% (in 2002).
„Consumers are telling us they will not cut back as much on spending as last year, but more so than in previous years,” said CUNA Chief Economist Bill Hampel. „Moreover, only 8% said they planned to spend more than last year, and this was the lowest percentage we have seen in the past 10 years.”
A key reason for this intended spending restraint is how consumers assess their financial situation compared to last year. Far more consumers said their situation was worse (36%) than better (19%), though nearly half (44%) said their situation was about the same.
Trucks Wait for Holiday Freight (Fleet Owner)
In trucking’s not-so-distant past, the third and fourth quarters of the year represented a “peak season” of sorts for freight volumes as retailers stocked their shelves ahead of the Christmas holiday. Yet that healthy annual bump in shipments has largely disappeared, due in part to changing consumer buying habits and, of course, the economic downturn. The question for many in trucking, however, is this: will the traditional “peak season” return or is it gone for good?
“Although there are signs of economic recovery, forecasters predict U.S. consumers will spend conservatively for the holidays this year,” noted Kurt Kuehn, CFO for United Parcel Service, in the company’s third-quarter earnings report. “Our customers have widely differing views on their outlook for the holiday season.”
According to a recent survey by Consumer Reports, the overall bulk of consumers are reluctant to increase their retail spending habits as the unofficial start of the holiday shopping season approaches.
“Retail purchases in the past 30 days, as well as the overall outlook for the next 30 days remain soft, with little interest in increasing spending in other areas like appliances, yard and garden tools, cars or new homes,” explained Ed Farrell, a director of the Consumer Reports National Research Center. “While relative stability has returned to the Retail Index, it has not been able to demonstrate growth for three straight periods. With the holiday season fast approaching, this has dire implications for expectations this season.”
Industry experts have been cautious in their view of the holiday season, a crucial period for retail profits, in the wake of a disastrous 2008 and mixed signals on whether the U.S. economy is recovering.
The ICSC has forecast holiday sales to rise about 1 percent to 2 percent this year in one of the more bullish predictions….
The survey found that consumers are planning to spend an average of $543 on gifts and another $133 on gift cards this holiday — compared to year-ago figures of $533 for gifts and $173 for gift cards.