US consumers plan to spend, on average, $832.36 on holiday-related shopping, up only 1.9% over last year’s $816.69, according to the National Retail Federation’s 2008 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, reports Retailer Daily.
That’s the lowest increase in planned holiday shopping since the survey began in 2002, NRF said. It continues to expect total holiday sales to increase 2.2% to $470.4 billion.
Though shoppers choose to visit stores for different reasons, consumers say one factor – price – will play the biggest role in buying decisions this year:
- 40.0% of shoppers say sales or promotions is the largest factor when determining where to shop
- Another 12.6% state that everyday low prices are the most important factor.
Other consumers rate selection (21.5%) and merchandise quality (13.4%) as the primary factor; and a handful of consumers say 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.”
Other key findings:
- As in previous years, gift-giving is the largest component of shoppers’ budgets. This year each person will, on average, spend $466.13 on gifts for family, $94.52 on friends, $26.70 on coworkers, 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 a year ago.
- As the internet becomes part of the retail mainstream, 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 and the internet will influence 33.6% of holiday purchases, up from 30.2% last year and 28.9% in 2006.
- 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).
- 40.2% of consumers will start their holiday shopping before Halloween – that’s consistent with from previous years’ levels and demonstrates that bargain hunters are looking for ways to spread out spending over a period of time, according to the NRF.
- 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.
- 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.
“It might not be easy to pull back on small gifts for a coworker or a child’s teacher, but consumers feel like their family understands their current situation,” said Phil Rist, VP 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.”
About the data: The NRF 2008 Holiday Consumer Intentions and Actions Survey (pdf) was designed to gauge consumer behavior and shopping trends related to the winter holidays. The survey polled 8,117 consumers and was conducted for NRF by BIGresearch September 30 – October 7, 2008. That was after Congress passed the economic rescue package but before substantial stock market declines.