Holiday Spending Looks Flat or Slightly Up (Update)

October 21, 2011

This article is included in these additional categories:

Analytics, Automated & MarTech | Data-driven | Financial Services | Hispanic | Retail & E-Commerce | Uncategorized

gallup-xmas-spend-oct-2011.JPGAmericans forecast they will spend $712 on Christmas gifts this year, nearly identical to the $715 they estimated they would spend on Christmas at this time last year, according to data released by Gallup in October 2011. More specifically, Gallup data shows about one-quarter of Americans plan to spend at least $1,000 on gifts, another quarter say they will spend between $500 and $999, and about one-third will spend between $100 and $499.

In addition, very few consumers plan to spend less than $100 while 14% are unsure.

The poll, conducted Oct. 6-9, 2011, also shows little change compared with October 2010 in Americans’ estimates of whether they will spend more or less on Christmas gifts than the year before. Roughly twice as many Americans say they will spend less rather than more on gifts this year (29% compared to 15%), while 54% say they will spend about the same.

Today’s “spend less” figure is a bit lower than the 35% and 33% recorded in 2008 and 2009, respectively; years in which there were actual declines in holiday retail spending, according to National Retail Federation data.

Historical Gallup data shows that holiday retail spending rebounded somewhat in 2010 after three years of highly anemic sales. Thus, if consumers’ 2011 Christmas spending intentions remain at 2010 levels, 2011 holiday retail spending could be flat, although at a modestly improved level from 2008 to 2009.

NRF: Per Person Spend Down, Overall Spend Up

nrf-holiday-sales-oct-2011.JPGHoliday shoppers say they plan to shell out an average of $704.18 on holiday gifts and seasonal merchandise, down slightly from last year’s $718.98, according to the National Retail Federation (NRF) 2011 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch. NRF is still forecasting overall holiday retail sales to grow 2.8% during the months of November and December to $465.6 billion.

Nearly six in 10 holiday shoppers (59.9%) say they plan to take advantage of retailers’ sales and discounts to make additional non-gift purchases for themselves and their families during the holiday season. The average person will spend approximately $130.43 during the holiday season to take advantage of sales and discounts on apparel, electronics, home goods and other items for themselves or a family member, up about 16% from $112.20 last year.

Department stores, with unique private-label offerings, will see an increase in traffic over last year (56.9% compared to 54.5% last year), as will clothing or accessory stores (35.2% compared to 33.6% in 2010), drug stores (21.1% compared to 18.9% last year), and grocery stores and supermarkets (48.8% compared to 46.7% last year), and most will head to discount stores (66.1% compared to 65.1%.) Crafts and fabric stores will also see a slight uptick in holiday shoppers (17.5% compared to 16.1% in 2010).

When asked which one factor will be most important when shopping this holiday season, sales or price discounts largely win out (41.6%), but customer service (6% compared to 5.3% last year) and quality of merchandise (14.6% compared to 12.7% in 2010) are continuing to become more vital components in consumers’ decision making processes.

NPD Group: Consumers Plan Flat Holiday Spending

npd-101011.JPGThis year, the majority of consumers still say they plan to spend the same amount of money on holiday gifts (64%, a 5% increase from 61% in 2010), according to the 2011 Holiday Retail Outlook from The NPD Group. The fewest number of respondents say they plan to spend more (9%, flat from last year).

Consumers also tell NPD they plan to begin their shopping at or about the same this year as last year. This year, almost 41% of consumers say they plan to start their holiday shopping on Thanksgiving weekend or later, compared to 40% last year.

The top categories consumers plan to shop this holiday, here again look very much like last holiday’s top 10 list. Clothing, toys, and books are the chart toppers in 2011 as they were in 2010. In addition, there is a 9% increase in the number of consumers planning to shop online this year compared to 2010 (38% compared to 35%). Furthermore, there is some encouraging news for the department store channel as 9% more consumers plan to shop in them this holiday (24% compared to 22%).

Prosper: Men, Hispanics More Likely to Increase Holiday Spend

big-holiday-preview-oct-2011.JPGBased on their current situation and feelings toward the economy, men and Hispanics are respectively more likely than women and the general adult population to plan to spend more this holiday season, according to data from Prosper Business Development. Results of the September 2011 “Consumer Intentions and Actions Survey” indicate 8.9% of Hispanics plan to spend more, 37% more than the 5.6% of adults 18 and older who plan to spend more.

Meanwhile, 29% of Hispanics plan to spend the same this holiday season and 38.5% plan to spend less. All three results are roughly flat with 2010, while in 2009 the percentage planning to spend less was somewhat higher and the percentage planning to spend more was somewhat lower, with a notably lower figure planning to spend the same.

About one in five (19%) Hispanics say it is too early to know what they spend on the holidays this year, similar to the 22.2% of the general population.

In addition, 11.3% of men plan to spend more on the holidays this year, 85% more than the 6.1% of women planning to spend more.

Deloitte: Small Holiday Sales Gain Expected

Retailers should expect small gains in 2011 holiday sales, according to a Deloitte forecast. Deloitte’s retail & distribution practice expects total 2011 holiday sales to reach between $873 and $877 billion, representing a 2.5 to 3% increase in November 2011 through January 2012 holiday sales, excluding motor vehicles and gasoline, from last season. This growth rate is smaller than last year’s 5.9% gain.

Furthermore, Deloitte forecasts a 14% increase in non-store sales. Nearly three-quarters of non-store sales result from the online channel with additional sales coming from catalogs and interactive TV.

Holiday Spending Forecast: Chilly

biginsight-holiday-2011.JPGThe US consumer holiday spending forecast for 2011 looks chilly for the retail industry, according to [download page] data released in September 2011 by both BIGinsight and The Nielsen Company. Overall, results from the BIGinsight Analysis of Consumer Intentions and Actions Survey indicate 38.5% of adults 18 and up plan to spend less and 32.3% plan to spend the same for the December holiday season compared to last year.

Meanwhile, only 5.9% plan to spend more, while 23.4% say it’s too early to know. All results are virtually flat compared to responses given in September 2010. According to the BIGinsight Diffusion Index (those who say they’ll spend less subtracted from those who will spend more), which BIGinsight says means spending plans for customers across all retailer types are being impacted by their present feelings towards the economy.

Only Costco Customers Have More Positive Outlook

When it comes to customers of specific retailers, only Costco customers are more positive about spending this year over last year. On the other hand, customers of rival discount warehouse club chain Sam’s Club customers have a more negative outlook. Macy’s and eBay customers are similar to last year and customers of Amazon, Best Buy, Gap, JC Penney, Nordstrom, Sam’s Club, Toys R Us and Wal-Mart all have lower expectations for holiday spending this year than in 2010.

Nielsen: Affluent Will Drive Limited Holiday Spending Growth

Online, club, dollar, toy and consumer electronics retailers, as well as categories such as gift cards, technology, vacations and toys, will all perform well this season, according to The Nielsen Company’s Holiday Shopping Sales Survey. Across all income levels, only 5% of US households plan to spend more on the upcoming holidays this year than last year, with affluent households (those earning $100,000 or more) leading the way.

Among households earning $100,000 or more, consumers ranked online merchants, club stores and dollar stores as the top three channels where they plan to spend more this shopping season. Among households making $50,000 or less, consumers plan to increase their spending at dollar stores, online merchants and supercenters.

Nielsen expects the vast majority of consumers to be increasingly practical and focused on value this season, with more affluent consumers driving spending, particularly in entertainment, vacations, toys and technology.

1 in 3 Consumers Will Have No Spare Holiday Cash

Recent findings from Nielsen’s Consumer Confidence Index revealed consumer sentiment is near recession lows, with one out of every three respondents reporting they’ll have no spare cash going into the holiday season. Roughly 52% of Nielsen Holiday Survey respondents reported plans to spend $500 or less. At the other end of the spectrum, affluent households reported plans for modest spending increases in stores as well as for out-of-home and in-home entertaining.

Other Findings

  • Almost 40% of consumers plans to use coupons, close to double a little more than 20% before the recession.
  • Close to 20% of consumers have already started their holiday shopping.
  • 62% of consumers plan to use holiday shopping lists.
  • 46 percent of respondents report plans to eat out less.
  • 40% plan to stay at home more.
  • 31% plan to buy value brands.

About the Data: BIGinsight surveyed 9,000 consumers of various retailers during September 2011 in order to gauge their spending plans for the upcoming holidays. Nielsen’s Holiday Shopping Survey is based on online survey responses from nearly 25,000 US households. In addition, Nielsen conducts weekly surveys of 250 consumers to gauge the holiday season.

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