Holiday Surveys: Putting Tinsel on a Charlie Brown Tree
The holiday surveys keep pouring in, and at a quick glance these polls send mixed signals.
The latest is a survey from Consumer Reports, which shows two-thirds of U.S. adults plan to spend less this holiday season than last year.
This survey comes only a day after a separate poll from Deloitte touted the return of holiday cheer with its findings that more than half — about 51 percent of those surveyed — hope to spend more or the same on the holidays.
So who do you believe? Earlier this week, we highlighted five reasons why analysts were arguing that holiday spending will be up compared with last year's weak results. These reasons included recent trends in store traffic, consumer "frugal fatigue", and recent comments from retailers, among others.
This post generated a lot of comments, many of which argued that factors such as high rates of unemployment would keep a lid on consumer spending. Several readers even pointed out that our own unscientific poll, which was shown with the article, showed a majority of those who responded planned to spend less on holiday gift-giving.
"I'm not a fatalist, I hope for the best, but I think Wall Street has truly lost touch with Main Street this year," wrote Clint, one reader who offered his opinion. He provided his own five reasons why he was planning on spending less on his holiday purchases: unemployment, reduction in wages, higher fuel prices, higher prices all around, and being "just not that into it."
Time will tell how the holiday plays out, but it is important to point out that no one is predicting a return to carefree spending.
Even those forecasts that call for an increase in consumer spending point out that if sales rise modestly this year, spending over a two-year period would still be down compared with the 2007 holiday season.
In other words, the more upbeat forecasts are sort of like putting shiny tinsel on a scraggly Charlie Brown tree. The comparatively rosy picture emerges only from the extent to which consumer spending contracted last year.
Deloitte's Stacy Janiak said the results of her firm's study were driven by a focus on being with family and friends and a need to replenish clothing and other products after holding back on spending over the past year.
Deloitte's survey, which anticipates consumers will spend $1,145 on the holidays, or an increase of 16 percent from last year. However, that number includes not only gifts, but other categories such as socializing away from home, entertaining and non-gift clothing and holiday furnishing.
What it could mean, is that some consumers who didn't buy a special dress or sports coat for the holidays last year, may purchase one this year. That kind of behavior, while modest, can add up.
Deloitte's study found consumers will still be thinking about the economy when they shop and will look for bargains, buy items on sale, or select lower-priced items.
This point was echoed in the Consumer Reports survey. Half of the consumers they talked with will make a budget.
But budgets are only good if you follow them, and Consumer Reports points out, consumers don't always do what they say. Of the 38 percent of consumers who said they made a budget last year, 44 percent admitted to exceeding it and 5 percent they went way over their budgeted limit.
That may explain why 6 percent say they are still carrying debt from last year's holiday purchases.
At a time when consumers have been attempting to whittle down their debts and credit card companies are continuing to raise credit card interest rates, the lingering debtload does not bode well for consumer spending during the holidays. However, that rate is virtually unchanged from the response in Consumer Reports' 2008 holiday survey.
More from Consumer Nation:
- A New Competitor Pops Up in the Toy War
- Toy Price Wars Rage On, but Now There's an App for That
- In Beerland, There's No Pumpkin Shortage
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