Consumers hose down holiday intentions
-- Home Textiles Today, 11/18/2008 1:33:00 PM
Washington – “Consumers are really constrained by what they can spend,” and not counting on using credit cards to substantially boost their holiday shopping at a time when their economic confidence is near rock bottom, said Pam Goodfellow, senior analyst, BIGresearch today.
Speaking on a National Retail Federation conference call, Goodfellow reported that the most recent Consumer Intentions and Actions survey, conducted with more than 8,000 consumers, Nov. 5-11, showed a slight bump up from October, due to results in the national election.
At 22%, it is still “the lowest confidence reading heading into a holiday season” ever recorded by BIGresearch, she noted. Among those who voted for President-elect Barack Obama, she added, the reading was about 27%.
The overall reading one year ago was 37%.
Reaching new heights was the proportion of those surveyed who said they are more focused “on what I need rather than what I want,” with 58% answering in the affirmative.
Goodfellow emphasized that consumers this season will be dedicated bargain hunters – “watching for sales, comparing prices, using coupons” and making decisions for “cotton vs. cashmere, synthetics vs. leather” in a shopping environment where she said it has become “chic to be cheap.”
Ellen Davis, vp NRF, said another new survey by the trade group showed that credit cards will be down a bit as the primary spending vehicle.
Even more emphatic is consumers’ intended expenditure on gift cards: down 5.6% this year – but still about $25 billion – from the all-time high in 2007.
Several factors underlie this change. Some 23% said gift cards are “impersonal.” Some consumers said they would prefer to buy merchandise on sale as a way to obtain fuller value.
Retailers, selling less volume as gift cards, could see more sales of tangible goods in November and December, reasoned Davis, but could also be impacted by lower redemption rates in January and February; the card sales are typically counted as revenue when redeemed. Sensing this, retailers may order fewer fresh goods to restock shelves late in the season than in previous years.
She added that much of the redemption last year had shifted to purchases of practical necessities over fashion goods and discretionary buys.
