While many Americans say they intend to spend less during this year’s holiday season, spending on gifts is expected to hold steady and the number of gifts consumers plan to give is up compared with 2006, according to the 22nd Annual Holiday Survey of retail spending and trends, commissioned by Deloitte.
The survey shows that four in 10 consumers (41 percent) expect to reduce their spending this holiday season. Areas where spending is likely to be down include home improvements, socializing/entertaining, charitable donations, home/holiday furnishings and non-gift clothing. However, consumers said they plan to spend about the same on gifts as they did last year, and they expect to buy more of them – an average of 23, up from 22 last year and the highest over the last six years. Women plan to buy even more, with an average of 26 gifts.
As a back-drop to these spending expectations, American consumers are less optimistic about the economy, with only 57 percent of consumers surveyed saying the economy will improve or remain the same next year. However, the vast majority (85 percent) say they feel secure about their jobs, which is about even with last year. Surprisingly, the recent credit crunch was not cited as a primary reason for spending less this year. Lower income households were more likely to cite higher food and fuel costs as the reasons for spending less this year, while those at higher income levels were more likely to cite volatility in the stock market and declining home values.
Department stores – both traditional and discount – continue to be the top shopping destination, reflecting a continued time-pressured consumer, a need for convenience, and a long-term trend of fewer shopping trips and fewer stores visited. In addition, older consumers – those aged 61-74 – plan to spend 27 percent more than the average consumer, giving added credence to this demographic, which traditionally has reported higher holiday spending.
For the fourth straight year, gift cards are expected to be the top gift purchase, with more than two-thirds (69 percent) of consumers surveyed planning to buy them, compared with 66 percent last year. In addition, holiday shoppers are planning to buy even more cards this year: an average of 5.5 cards, compared with the 4.6 cards they planned to buy last year. One in six consumers (16 percent) plan to buy 10 or more cards, compared with 11 percent last year. Consumers are also spending more in total on gift cards and more per card: $36.25 per card on average compared with $30.22 last year.
Gift cards continue to grow in acceptance: Almost four in 10 consumers surveyed (39 percent) would rather get a gift card than merchandise, an increase from last year’s 35 percent. Also, resistance to giving gift cards continues to decline: 19 percent say they don’t like to give gift cards because they’re too impersonal (down from 22 percent last year). Consumers said that the cards are popular gifts for adults, teens and children alike, and almost half (46 percent) intend to buy them for immediate family; however, they are hesitant to buy them for spouses or significant others, with only 14 percent saying they plan to buy them for those recipients.
In the wake of recent product recalls, consumers are increasingly concerned about the safety of imported products, with those over age 44 being most concerned. More than half of consumers surveyed (54 percent) say a product's country of origin is important to them when making a purchase decision. Almost four in 10 consumers (38 percent) said they feel food products imported from other countries are not safe, and more than one-third of consumers (35 percent) said the same for non-food products. Almost six in 10 (58 percent) say the recent news stories about product recalls will influence some of their purchase decisions this holiday season. Of these shoppers, 82 percent say such concerns will influence their buying decisions on toys and 70 percent say the same with respect to food purchases.
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