New York—Despite a drop in consumer confidence, rising prices across retail, and worries about a double dip recession, holiday shoppers aren’t going to play Scrooge like they did at the height of the Great Recession in 2009. Instead, they plan to put aside those worries and still spend more than during the recession.
In its 26th annual survey of holiday spending intentions and trends, Deloitte LLP reported today that consumers say that while they plan to spend less this year than in 2010, they don’t plan to tighten purse strings as much as they did in 2009.
“Lackluster employment growth, debt crises and stock market fluctuations have battered consumer confidence while inflation left many with lighter wallets this fall,” said Alison Paul, vice chairman and U.S. retail & distribution leader, Deloitte LLP. “Consumers will be conservative this holiday season, but remain resilient and maintain a more positive interest in holiday shopping than we witnessed during the recession.”
According to the Deloitte findings, two thirds (67%) of consumers expect the economy to stay the same or weaken next year, nearly three out of five (59 %) will put aside economic worries and spend the same or more this holiday season. This is a slight decline from 2010 but an eight-percentage point increase from 2009, Paul added.
When asked what higher costs were causing them to pull back in spending, 63% cited higher food prices and 60% cited higher gas prices. As a result holiday shoppers say they will spend on 14.7 holiday gifts this year, down from 16.8 last year and “continuing a four-year decline in the number of gifts they plan to purchase.”
Internet, Mobile Shopping Gain in Gift Shopping Importance
While the spending decrease is more evident along middle- and lower-income groups, shoppers at households earnings $100,000 or more say they plan to trim only 2% of their gift purchases, spending an average of $812 compared with a 26% drop to $291 on gifts among those earning less than $100,000.
Last month, Deloitte’s retail & distribution division forecast total holiday sales to reach between $873 and $877 billion, a 2.5 to 3% increase in November through January holiday sales. This growth rate is smaller than last year’s 5.9% gain.
Perhaps more important than how much consumers plan to spend is how they plan to shop—not surprisingly they will be relying more in the Internet and hand-held devices such as smartphones to assist in their decision making. (Retailers take note)
“Consumers are using online and mobile platforms to make the most of their holiday budgets, and the survey indicates that they will do more than just compare prices,” said Paul. “Retailers that use mobile and online channels to show product availability, locations and pricing but add customized promotions and gift ideas may encourage shoppers to come in the door for a specific gift and take additional items to the register.”
In fact, 68% of consumers plan to change the way they shop to save money, and more than half in this group (51%) will head online to find better prices. This represents a 10 percentage point jump from last year, while 46% plan to buy more items that qualify for free shipping.
Among the other consumer shopping trends uncovered in this year’s survey include
• More than one-quarter (27%) of smartphone owners plan to use their devices to search for store locations (67%), compare prices (59%) and check product availability (46%).
•Another 44% plan to use social media, such as Facebook, to seek discounts, read reviews and check family and friends’ gift lists.
•Internet shopping tied discount retailers as primary destinations for holiday shoppers. Discounters dropped 10 percentage points from last year; Internet gained 13 points.
•Clothing (at 48%) topped the gift list this year, surpassing gift cards (45%), as most popular gift item.
•More than half (53%) plan to do their shopping before Thanksgiving, while 73% plan to wait until after Black Friday to begin buying most of their gift purchases.
•Generation Y shoppers are most likely to take advantage of Black Friday doorbuster and other promotions (42%) 18 to 24 year olds said they plan to shop that day compared to 24% among those ages 25 and older.
•The same 18 to 24 year olds (37%) plan to partake in Cyber Monday shopping compared to just 20% among older shoppers.
About the survey
The survey was commissioned by Deloitte and conducted online by an independent research company between September 16 and 26. The survey polled a sample of 5,019 consumers and has a margin of error for the entire sample of plus or minus one percentage point http://www.deloitte.com/us/2011HolidaySurvey.