Oct 24, 2006
Shoppers Plan to Spend $800 On HolidaysSource: National Retail Federation

With the average shopper expected to spend nearly $800 this year on holiday merchandise, retailers may be jingling all the way to the bank. The National Retail Federation’s (NRF) 2006 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, found that the average consumer plans to spend $791.10 this holiday season, up from $738.11 last year. Furthermore, shoppers will take advantage of sales and discounts during the holiday season to spend an additional $99.22 on themselves.

“With gas prices coming down and consumer sentiment on the rise, shoppers want to celebrate the holidays in style,” said NRF President and CEO Tracy Mullin. “Retailers will be sure to give consumers a reason to spend their extra disposable income in the stores with enticing incentives and special promotions.”

Consumers this year will shop at a variety of destinations for holiday gifts. While discount stores (70.3 percent) continue to be the most popular holiday shopping location, many people will also be shopping at specialty stores (48.4 percent), grocery stores (49.3 percent), drug stores (21 percent) and craft/fabric stores (20.5 percent). Additionally, nearly half (47.1 percent) of consumers said they plan to shop online this year, up from 36 percent three years ago.

For this holiday season, 61.6 percent of shoppers plan to shop at department stores for holiday items, up from 53.1 percent in 2003. Department stores are likely to see much of their traffic from young adults, with 79.1 percent of 18-24 year olds planning to shop at department stores for holiday merchandise, up from 72.9 percent last year and 65.9 percent in 2004.

“Young adults see the holiday season as a time to splurge, not skimp, on gifts for loved ones,” said Phil Rist, vice president of strategy for BIGresearch. “Department stores are likely to see a surge in sales from young consumers, positioning them well not only for the holiday season but for years to come.”

Most holiday budgets will be allocated to gifts, with the average person spending $451.34 on family, $85.60 on friends, $22.40 on coworkers and $44.52 on other people like clergy, teachers and babysitters. The survey also found that most Americans plan to increase spending on flowers ($18.98 vs. $15.78 last year) and decorations ($46.49 vs. $40.86 last year). Consumers also plan to spend $91.20 on candy and food and $30.57 on greeting cards and postage.

Though holiday promotions have barely begun, many consumers have already started holiday shopping. According to the survey, 40.4 percent of consumers will begin their holiday shopping this year before Halloween.

Most shoppers’ wish lists will include traditional favorites, from clothing and accessories (53.3 percent) to books, CDs, DVDs, videos and video games (55.2 percent). Gift cards will also continue to be popular, as 52.8 percent of consumers would like to receive a gift card this year.

While the majority of shoppers continue to say low prices (14.2 percent) and sales or price discounts (36.5 percent) bring them into stores, more shoppers this year said other factors like customer service (4.4 percent), product quality (12.4 percent) and merchandise selection (24.3 percent) are the most important when determining where to shop. Additionally, 6.5 percent of shoppers said they choose stores with the most convenient location.

NRF continues to forecast that holiday sales will increase 5 percent this year to reach $457.4 billion.