The air is crisp and there’s even snow on the ground in a few parts of the country. Fall festivals and pumpkins are just about everywhere. Yes, it’s October, which means it’s time to think about…Christmas? While retailers are already gearing up for the holiday season this month, they’re not the only ones: in fact, almost 40% of Americans plan to start their holiday shopping before Halloween. That explains those tree trimmings, plastic Santas and garland in the stores.
With the holidays on everyone’s mind, NRF vice president Ellen Davis joined CNBC’s Power Lunch yesterday to discuss everything and anything you could possibly want to know about our 2010 holiday spending survey, released yesterday.
During the interview, Davis outlines why there is actually a bit more room for optimism this year. Not only are consumers expected to spend more, but they’ll be buying more discretionary items like jewelry. She also notes that more people are expected to spend on themselves this year as well – a trend not seen since pre-recession.
Davis also outlines how retailers’ inventory levels will still be lean but that consumers will still win in the end with promotions, coupons and sales – and that it’s not only about value, it’s also about convenience. Although, she notes, the economy is still on people’s minds, so consumers will continue to be realistic with their shopping budgets.
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Ellen must not have seen the recent Gallup Poll…..
Early indications point to a third straight year of declining holiday spending, a Gallup poll shows.
Gallup showed that American consumers plan to spend an average of $715 on gifts, compared to $740 at this time last year and $801 in 2008 and down from $909 in 2007.
The Oct. 7-10 poll also showed that 27 percent intend to spend less on Christmas gifts this year than what they spent last Christmas, compared to 33-35 percent who said that in the last two years.
About 11 percent said they will spend more. About 59 percent said they will spend the same.
“Americans’ average prediction of the total amount they will spend on Christmas gifts this year is not highly encouraging for retailers, who may be hoping for a return to prerecessionary buying habits,” Gallup said.
Read more: Another holiday spending drop projected | Silicon Valley / San Jose Business Journal
In the end, as a retailer, who do I believe?!
Hi B. Thanks for your comment.
As I’m sure you are aware, every group calculates the holiday season differently (some include sales from Black Friday through Christmas, some look at the full months of Nov and Dec, others even include January). You’re right, I hadn’t seen the Gallup poll, and the results from our survey do seem quite different. (I can’t speak for Gallup, but in our survey’s defense I will say that this is the ninth year we have conducted this exact survey and our pool of respondents is over 8,000 – so it’s very accurate.)
According to our research along with government data, holiday sales did not decline last year – they rose by 0.4%. You can find that information in our Holiday Survival Kit at http://www.nrf.com/holidaysurvivalkit. When discussing a decline, it seems that the Gallup poll may be referencing their previous year’s survey but is not comparing it to what actually happened (ie: the government data, which is publicly available).
Regardless of the survey metrics or holiday definition, it does seem that the message from both surveys is similar: consumers have not returned to pre-recession spending levels. In our survey, for example, spending will be more comparable to 2008 but nowhere close to the level we saw in 2007. As I mentioned in the CNBC clip, the mentality of the American shopper is very different as well. You can see that trend play out both in our survey and the government data that was released last year.
Hopefully this provides some clarity!
How are you arriving at the conclusion that consumers are shifting away from Discounters and to Dept and Specialty stores? All three channels showed declines. I see that the decline in discounters is steeper, but that seems to be counterbalanced by the fact that it’s still a more preferred channel than either Dept or Specialty.
I took the early Christmas marketing blitz this year as a sign that many retailers were expecting low sales, but if 40 percent were planning to start shopping before Halloween maybe they were just reacting to a rise in earlier shopping trends.
I agree that convenience is becoming a major issue with some buyers. They not only want great deals, but they don’t want to fight crowds or drive clear across town to get them. I expect this is also contributing to the increase in online sales.