BigResearch, NRF share holiday survey results
Home & Textiles Today Staff -- Home Textiles Today, October 23, 2009
Worthington, Ohio – While consumers are planning to spend more in the next 90 days than they did a year ago as they prepare to face the critical holiday spending season, a survey conducted by BigResearch found that shoppers still expect to restrict their gift purchasing to less than they did in 2007 – prior to the recession.
Mirroring those findings, the National Retail Federation (NRF) said consumers will largely focus their gift giving on homemade presents, practical items or joint gifts, and will concentrate their shopping mostly at discount and thrift stores this holiday.
At a webcast presentation today by BigResearch about consumer confidence in October, speaker Ellen Davis, vp, NRF also discussed the retail trade association’s recent findings on retailers’ and shoppers’ plans for this holiday season.
BigResearch’s findings for its consumer confidence study surveyed 8,400 shoppers between Sept. 30 and Oct. 7.
At the forefront of the study released today was consumer confidence, with 38.4% of respondents saying they were very confident or confident about the chances for a stronger economy. This result proved better than the same time last year, when only 19% felt similarly, but it’s still down from 2007, when consumer confidence reached 44.8%.
Davis said NRF’s holiday forecast this year calls for sales to decline 1% from last year, urging that there are two ways to look at news.
“On the one hand, this is not great news. Usually, holiday sales increase every year about 3.5% or 4%,” Davis noted. Since 1995, NRF has tracked an increase every year with the exception of 2008.
“The good news, and the way that we look at this, is in terms of percentages – growth or decline,” she continued. “The decline we are expecting this year is not as severe as the decline retailers saw last year, which is an indication we think that retailers are starting to turn the corner. We’re not there yet but it is certainly an encouraging sign that holiday sales will be closer to flat than they were a year ago.”
That said, NRF is projecting the 2009 holiday season to ring in sales of $438 billion – “certainly no small chunk of change,” she remarked. By comparison, the Halloween spending season comes in at about $5 billion. “This puts into context just how huge the holiday season is for retailers,” she continued.
With retailers more optimistic but still cautious, inventory levels this year will be the same as those in 2003 or 2004, NRF found. “This means that there isn’t as much merchandise for retailers to draw from. And what this means for shoppers is that people need to shop early to get the best selection,” Davis said.
“Last year, retailers had too much inventory the week before Christmas, and many of them were forced into panicked discounts and mark downs. This year, retailers have had an entire year to plan for a holiday season where consumers are pulling back and many have responded with lower inventory levels in expectation of softer demand,” she added.
In numbers, this amounts to 41% of retailers surveyed who said they will reduce their inventory levels for the season as a result of the economy.
Retailers’ expectations are in response to consumers’ intentions for this holiday. Based on its research, NRF said many shoppers plan to make their own gifts, buy more practical gifts, or participate in joint gift giving.
“That is one way people are compensating for the economy in their gift giving,” she said. “And we’re also seeing a huge impact on where people plan to shop.”
It comes as no surprise, then, that discount chains came in the top destination for consumers this holiday season, with 70% planning to make at least one gift purchase at a discounter.
“We are also expecting 11% to buy at least one holiday item from a thrift store or resale shop,” she added.
To draw in customers, retailers told NRF that sales and promotions will be “key” this holiday, as 50% of consumers plan to research sales and discounts before making a purchase.