Shop Talk

Retailers, consumers and prices

Why retailers can expect modest holiday spending growth

As the 2012 race to the holidays kicks off, shoppers in America are experiencing economic sobriety.  With 23 million people still looking for work, home prices still down, and those with jobs holding little hope for salary increases, the season is shaping up as a time of controlled spending. Without question, consumer purchases will be made through a lens of affordability.

Still, in the past few weeks I have visited with small groups of shoppers in California, Phoenix, Dallas, New Orleans, northern Pennsylvania, and finally New York City; I found a consensus of hope as the holiday season approaches, and a feeling of thanks at having survived another tough year.

American consumers have grown tired of continuing signs of economic uncertainty. My conversations with American shoppers, as well as earlier consumer research by Booz & Company, indicated several changes that will set the stage for a holiday season that’s focused on affordability:

1. In almost all of our conversations we asked the following question “What will be different about this holiday season over past seasons?”  The overwhelming response was bringing together family and friends to celebrate.

Many Americans plan to spend less on gifts this year

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USA/If you received a great Christmas present last year, and are hoping for the same kind of treatment this year, don’t hold your breath — U.S. consumers are planning to spend conservatively this holiday season, according to two new surveys.

Gallup poll found that consumers, on average, plan to spend $740 this year on holiday gifts. At this time last year, consumers said they planned to spend $801 on average. That number fell to $616 during a November poll, although it recovered slightly to $639 in a December poll.

Check Out Line: Holiday wishes for a better economy

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Check out samsantaAmericans, fed up with financial doom, who are wishing for a cheerier economy in 2009.

The Marist Institute for Public Opinion in Poughkeepsie, New York, polled 1,003 Americans about their expectations for 2009 on December 9 and 10 — days after the National Bureau of Economic Research confirmed the United States had been mired in a recession since December 2007 — and found that Americans are optimistic that 2009 will be a better year.

Check Out Line: Retailers hope to lure with Cyber Monday deals

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Check Out the online deals planned for next Monday.

Most online shops are touting special promotions for Cyber Monday, the Monday after Thanksgiving when, admit it, you use your high-speed Internet connection at work to check out sales.  This year’s promotions — including a lot of free shipping — are crucial as retailers try to lure in shoppers who have been pulling back on spending ahead of the traditional holiday selling season.
 
SpendingPulse said Sunday that U.S. sales of everything from apparel to appliances plunged in the first two weeks of November, as consumers are cutting back on everything but necessities in this tough economy.  
 
Nearly 84 percent of online retailers plan to have a Cyber Monday promotion, up from 72 percent who planned Cyber Monday deals last year, according to a survey by online shopping site Shopzilla for Shop.org, the Internet division of the National Retail Federation.

In early November, Internet sales did not perform as poorly as the overall lot, according to SpendingPulse, the retail data service of MasterCard Advisors, an arm of MasterCard Worldwide.  Online sales showed the most modest decline of the period, at 7.5 percent. 

Check Out Line: Halloween spending not so spooky!

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halloween.jpgCheck Out more people escaping the troubled U.S. economy by turning themselves, their children and their pets into ghosts and goblins.

More than 64 percent of people plan to celebrate Halloween this year, up from nearly 59 percent last year, according to the National Retail Federation’s annual Halloween survey.

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