This is the holiday of the serious bargain hunter, according to several studies, including the NRF’s, 2009 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch. Consumers indicated an intention to spend, on average, $682.74 on holiday related shopping this year, a 3.2 percent decline from last year’s $705.01. “While last holiday season was filled with chaotic confusion, adjusting to uncertainty has now become routine for many Americans,” said NRF president and CEO, Tracy Mullin. “This holiday season will be a bit of a dance between retailers and shoppers, with each group feeling the other out to understand how things have changed and how they must adapt.”
Americans’ eagle eye on bargain hunting is adjusting the priorities of many shoppers. According to the survey, 43.3 percent of holiday shoppers said that sales and price discounts will be the most important factor when deciding where to shop, and 12.7 percent cited everyday low prices as the deciding factor. Other factors, such as selection, quality, convenience and customer service, were cited by 21 percent, 11.8 percent, 4.9 percent and 4.4 percent, respectively. And all four factors declined in comparison with their importance in last year’s survey.
Not surprisingly, the majority of holiday shoppers, 70.1 percent, said they will purchase from discounters this year, although more than half said they will also shop at department stores. Grocery stores, the Internet, clothing stores and electronics stores will also be popular destinations. In addition, one in ten holiday shoppers said they will buy gifts or other holiday related merchandise at thrift stores or resale shops.
Retailers are compensating for soft sales this holiday season by cutting back on inventory. According to NRF’s Port Tracker report, released in September, traffic to the nation’s ports has scaled back to levels not seen since 2003. “In anticipation of weak demand, many retailers scaled back on inventory levels to prevent unplanned markdowns at the end of the season,” said Mullin. “Once the most popular items are gone, retailers won’t have anywhere to get them.”
Whether they were shopping to get the best selection or trying to stretch out spending over a longer period of time, many holiday shoppers started early. According to the survey, 39 percent of Americans indicated they would begin their holiday shopping before Halloween, which is comparable to previous years. As in past years, three fourths of Americans’ holiday budget will be spent on gifts. While spending on family members will decline by a slight two percent to an average of $387.06 this season, gifts for friends and co workers are expected to take double digit drops.
Gifts for friends are projected to average $66.77 versus $80.13 a year ago. Gifts for coworkers are expected to fall to $19.26, down from an average of $22.63 in holiday 2008. Americans also said they plan to spend about five percent less, $34.81 this season, on “other” gifts, for such people as babysitters, teachers and clergy. Candy and food spending may be one bright spot this year, with the average person planning to spend $10 more in that category this season than a year ago. That would be an average of $90.26 in 2009. Spending on other non gift categories such as decorations, greeting cards and postage, and flowers is expected to drop slightly this season.
“While the economic climate has shown some improvement from last holiday season, retailers are not out of the woods yet,” said Phil Rist, EVP of strategic initiatives for BIGresearch. “With a variety of factors still up in the air, including uncertainty over job security, many Americans just aren’t buying into the talk of recovery.” Though Americans were less inclined to purchase gift cards last season, the popular gifts retain their spot at the top of the list among gift recipients. According to the survey, 55.2 percent of adults would like to receive a gift card this holiday season. Other popular gifts include clothing, cited by 48.8 percent of recipients; books and DVDs by 48.6 percent, and electronics by 33.2 percent. NRF continues to expect holiday sales to decline one percent to $437.6 billion this season.