According to the National Retail Federation’s annual consumer survey, shopping for this year’s holiday season will increase by the smallest amount in the survey’s history as U.S. shoppers will be more conservative with spending due to financial difficulties.
NRF’s 2008 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, said that U.S. consumers plan to spend an average of $832.36 on holiday-related shopping, up only 1.9% over last year. This marks the lowest increase in planned consumer spending in the history of the survey, which began in 2002, NRF said.
Overall, NRF projected total holiday sales to increase 2.2%, to $470.4 billion, through a survey of 8,117 consumers conducted between September 30 and October 7. However, because the results were compiled before the stock market decline, future projections are likely to be far more negative.
“Current financial pressures and a lack of confidence in the economy will force shoppers to be very conservative with their holiday spending,” said NRF chief economist Rosalind Wells. “We expect consumers to be frugal this season and less willing to splurge on discretionary items.”
According to the International Council of Shopping Centers, U.S. chain store sales are projected to increase 1.7% during the November-December holiday shopping season, noting that while chains will struggle, discounters and wholesalers stand to benefit from consumers ‘ lack of purchasing power.
"This year's holiday-season spending will be more modest compared with recent years as the U.S. financial and economic crisis weighs on consumers’ willingness and ability to spend," said Michael P. Niemira, ICSC chief economist and director of research. "Not surprisingly, big-ticket purchases are likely to take a backseat to more traditional, basic and value-oriented goods and services.”
According to the NRF survey, more than 40% of consumers plan to start their holiday shopping before Halloween, which is consistent with numbers from previous years. Surprisingly, the number of people who plan to buy gifts online is expected to remain flat, NRF said, with 44.2% planning to buy through the Internet in 2008 compared to 44.3% in 2007.
“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 & 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.”