Charity and Gas Refocus Holiday Spending Plans

Charity and Gas Refocus Holiday Spending Plans

According to the 20th Anniversary Holiday Mood Survey, by Deloitte & Touche, of retail spending and trends this holiday season, Americans will spend their money on holiday entertaining at home, non-gift clothing and holiday furnishings, as well as continued charitable contributions for hurricane and earthquake victims.

68 percent of households surveyed said they plan to spend the same or more during this holiday season compared to last year. These survey findings support Deloitte's expectation that non-auto holiday sales will increase 6-6.5 percent during the November-to-January period, less than last year's exceptional 8.6 percent increase, but still above the last decade's average growth rate.

Though overall spending on gifts is expected to be down, consumers aged 55 years and older plan to spend six percent more on gifts than they did last year. In addition, their spending is expected to be 22 percent higher than the average consumer ($735 vs. $604), reflecting, in part, the affluence of the Baby Boom generation.

Pat Conroy, Vice Chairman and National Managing Principal for Deloitte's Consumer Business industry practice, said "Consumers ... (are) looking for the basics: good deals, in-stock merchandise, easy return policies, extra sales help and registers, and extended shopping hours."

Roughly the same percentage of consumers as two years ago will spend some of their holiday budget on the Internet (69 percent), and the Internet share of their total holiday spend has also stayed the same, at 21 percent. One-third of consumers mentioned that higher gas prices contributed to their reasons for shopping on the Internet. This continues a trend that has evolved over two decades: 80 percent of respondents said they shop at fewer stores today than they did 20 years ago.

 

Why Consumers Shop the Internet, 2005 (% of respondents)

Convenience of 24/7 shopping

75%

Saves time

70

Less hassle / no crowds

67

Easier than in store shopping

52

Unique products not in stores

45

Free shipping

44

Easier to comparison shop

40

Better prices

40

Pay less / no taxes

36

Higher gas prices

35 (18% in 2004)

Source: Deloitte & Touche, November 2005

In 1985 67 percent of consumers did most of their shopping at either a traditional department store or a discounter. Today, consumers have no clear favorite. The top two choices, discount department store and Internet, were preferred by only 46 percent of respondents combined. Traditional department store was third, with 13 percent favoring it. 

Top Holiday Retail Shopping Destinations in 2005 (% or respondents)

Discount department store

57%

Internet

44

Traditional department store

42

Home electronic store

42

Warehouse club

28

Catalogs

27

Restaurant

26

Large toy store

25

Small apparel store

24

Off-price store

21

Home improvement store

19

Dollar store

17

Drug store

14

Jewelry store

12

Source: Deloitte & Touche, November 2005

Not only have their store preferences changed over the last 20 years, but consumers are also buying different types of gifts. 58 percent say they are giving more gift certificates and 30 percent are giving more cash. Gifts of services are also becoming more popular, with 17 percent saying they now give more of these types of presents. 35 percent say they are giving less clothing than they did 20 years ago. 

  "Online redemptions, co-branding and personalization of gift cards are some of the features that successful retailers are initiating this year," said Conroy.

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