NEW YORK —
The sluggish economy and rising household expenses are casting a chill over consumer confidence, but not enough to bring back the ghost of recessions past, according to Deloitte’s 26th annual survey of holiday spending intentions and trends.
While two-thirds (67 percent) of consumers expected the economy to stay the same or weaken next year, nearly three out of five (59 percent) will put aside economic worries and spend the same or more this holiday season. This is a slight decline from 2010 but an 8 percentage point increase from 2009.
Shoppers planning to spend less this year (42 percent) pointed to higher costs impacting their household budgets. Six out of 10 cited higher food prices (63 percent) and higher gas prices (60 percent) as reasons for spending less this year. Roughly half (49 percent) pointed to higher energy costs.
“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 and distribution leader, Deloitte. “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.”
With high prices leaving less in the household budget for other things, many consumers are re-evaluating gift-giving this year. Holiday shoppers planned to buy an average of 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.
Higher-income households’ gift spending will hold up while middleand lower-income groups are paring back. Households earning $100,000 or more annually expected to trim a mere 2 percent off gift spending to shell out an average of $812 on gifts this holiday season compared with a 26 percent drop to $291 on gifts among those earning less.
Despite smaller budgets, consumers may make the gifts more personal as more shoppers skip gift cards and cash this year. Consumers planning to purchase gift cards (45 percent) fell 11 percentage points to unseat this category’s seven-year reign at No.1 and elevate clothing (48 percent) to the top spot. The number who planned to hand out cash slid 7 percentage points to just 25 percent.
Deal-seekers are increasingly using online channels to get the most value. Nearly seven out of 10 (68 percent) of consumers plan to change the way they shop to save money, and more than half in this group (51 percent) will head online to find better prices. This represents a 10 percentage point jump from last year, while 46 percent planned to buy more items that qualify for free shipping.
Among shopping destinations, the Internet jumped 13 percentage points to join discount stores at the top of the list with nearly half (48 percent) of consumers planning to shop these two destinations for holiday gifts. While online interest climbed, discounters slid 10 percentage points from the 2010 survey.
More than one-quarter (27 percent) of smartphone owners planned to use their devices for holiday shopping to search for store locations (67 percent), compare prices (59 percent) and check product availability (46 percent). Additionally, 44 percent said they planned to use social media to seek discounts, read reviews and check family and friends’ gift lists.
Fifty-three percent of consumers planned to begin shopping before Thanksgiving, but 73 percent intended to hold out until after this holiday to make the majority of their purchases.