According to The National Retail Federations 2006 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, the average consumer plans to spend $791.10 this holiday season, a sharp increase from the $738.11 spent on average 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%) continue to be the most popular holiday shopping location, many people will also be shopping at specialty stores (48.4%), grocery stores (49.3%), drug stores (21.0%), and crafts or fabrics stores (20.5%). Additionally, nearly half (47.1%) of consumers said they plan to shop online this year, up from 36.0% three years ago.
This holiday season is likely to bring good news for department stores, as 61.6% of shoppers plan to shop there for holiday items, up from 53.1% in 2003. Department stores are likely to see much of their traffic from young adults with a whopping 79.1% of 18-24 year-olds planning to shop at department stores for holiday merchandise, up from 72.9% last year and 65.9% 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.”
As usual, 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 retailers have barely begun holiday promotions, many consumers have already started their Christmas shopping. According to the survey, 40.4% 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%) to books, CDs, DVDs, videos and video games (55.2%). Gift cards will also continue to be a popular request, as 52.8% of consumers would like to receive a gift card this year.
While the majority of shoppers continue to say that everyday low prices (14.2%) and sales or price discounts (36.5%) bring them into stores, more shoppers this year said that other factors like customer service (4.4%), product quality (12.4%), and merchandise selection (24.3%) are the most important when determining where to shop. Additionally, 6.5% of shoppers said they choose stores with the most convenient location.
NRF continues to forecast that holiday sales will increase 5.0% this year to $457.4 billion.