NRF: Shoppers plan to slightly up holiday spending

Retail Editor 7, October 19, 2010

Washington D.C. - In its first holiday survey this season, the National Retail Federation discovered that shoppers are planning on spending slightly more in this year's fourth quarter - about $688.87 - than they did last year, when their average spend was $681.83.

"Though Americans are still operating with the recession in the back of their minds and many have fundamentally changed their shopping habits," the NRF said, the findings from its 2010 Holiday Consumer Intentions and Actions Survey, conducted by consumer research firm Bigresearch, "imply consumers won't only be focusing on low prices and basic necessities this year."

The survey polled 8,767 consumers and was conducted from Oct. 5 to 12.

As they did in past holiday selling seasons, most shoppers will concentrate the bulk of budget - $393.55 - on buying gifts for family members. They've allotted $71.45 for friends' gifts, $18.26 for co-workers and $34.82 for others.

Décor and entertaining also fit into the budget: $41.51 on decorations, $26.10 on greeting cards and postage, $86.32 on candy and food, and $16.86 on flowers.

Total spending on gifts for this holiday comes to $518.08, and is expected to rise 2.1% from last year, which is in line with NRF's 2010 holiday forecast.

"Consumers will still shop with the economy in the back of their minds, but we're starting to see shoppers take baby steps toward a new normal," said Matthew Shay, NRF president and ceo.

NRF continues to expect holiday sales to rise 2.3 percent to $447.1 billion.

"As Americans open up their wallets for more discretionary gifts like jewelry or take advantage of sales to buy for themselves, retailers will begin to truly believe that the worst may be behind them," Shay added.

The survey also found that 61.7% of shoppers said the economy will impact their spending, down from last year's 65.3%. Many shoppers said they will compensate by either spending less (81.5%), comparison shopping online (30.9%) or with newspapers and circulars (28.1%), shopping for sales (54.1%), or using more coupons (40.6%).

"Although the economy continues to impact shoppers, a number of survey results indicate that shoppers may be ready to emerge from their shells this holiday season," NRF said.

When asked which one factor will be most important when shopping this holiday season, the majority of shoppers said that sales or price discounts (41.8%) or everyday low prices (12.7%) were most important. While those factors either declined or remained flat this year, two other categories rose in importance. The number of people who counted customer service as the most important factor rose from 4.4% last year to 5.3% this year, while shoppers who touted quality as the overriding factor rose from 11.8% to 12.7%.

"Price is paramount during any recession, but when the economy begins to recover other factors take on greater importance," said Phil Rist, evp, strategic initiatives, Bigresearch. "When shoppers consider other factors like customer service and quality in buying decisions, retailers have the ability to highlight a variety of other features to help their company stand out from the competition."

While many traditional categories like clothing (48.2%) and books (47.3%) will appear on a majority of shopping lists this year, jewelry will appear more often than a year ago, the survey found. "As a potential sign that discretionary gifts may become more popular," 23.0% of people will ask for jewelry this year, a significant 10% jump from last year's 20.8%. Gift cards will remain the most requested holiday gift this year, with 57.0% of people asking for plastic.

As another sign that shoppers feel a bit of breathing room in their budget: the number of people who said they will make a holiday purchase from a discounter dropped to 65.1% from 70.1% last year. Popular holiday shopping destinations will include department stores (54.5%), grocery stores (46.7%), the Internet (43.9%) and clothing stores (33.6%).

"Americans aren't only shifting where they're shopping - how they're shopping is changing, too," NRF added. "Mobile devices like iPhones and Androids are becoming more popular among consumers, and many shoppers plan to use these devices this holiday season to look for gift ideas, compare prices and find items in nearby stores."

More than one-fourth of surveyed American adults with a smartphone (26.8%) will use the devices to research or make holiday purchases, and that number jumps to 45.0% among young adults ages 18 to 24.

"Retailers are expected to take advantage of this trend by offering more robust mobile apps and websites, along with enhanced features like mobile reviews, to cater to Americans looking to shop from their phones," NRF continued.

Another sign of better times for this holiday is the number of people who plan to take advantage of holiday sales to make non-gift purchases for themselves, which is expected to rise 8.0% this year, with the average holiday shopper spending $107.50 on himself or herself compared to $101.37 last year.

Although the holiday season won't kick off for many retailers until at least Nov. 1, a sizeable number of shoppers are already planning ahead. According to the survey, 37.2% of shoppers will begin holiday shopping by Halloween. Women are the most likely to begin shopping by the end of October (42.1%) while young adults ages 18 to 24 are among the least likely (27.7%).


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