Commentary

Early To Rise, But Holiday Shopping Marginally Increasing

According to Nielsen’s 2013 Holiday Spending Forecast, retailers are already rolling out their holiday promotions, the day after Halloween. 22% of U.S. consumers report that they’ve already started their holiday shopping, but 60% say they will wait a bit before they start their shopping. The report says that this holiday shopping season will be marginally stronger than last year, with dollar sales rising just about 2% (Nielsen), buoyed by the strongest consumer sentiment in six years.

Holiday Retail Sales Trends (NRF; % Change Y-O-Y)

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Year

% Change Y-O-Y

2009

0.5%

2010

5.3

2011

5.1

2012

3.5

2013 (F)

3.9

Source: NRF, November  2013

Even with the increase in overall consumer sentiment, there are still people feeling the effects of the Great Recession, says the report. 20% of consumers say they have no spare cash, and 68% say they still feel like they’re in a recession. With respect to spending ability, 48% say they’re living comfortably or spending freely, while 52% say they’re limited to spending on only the basics.

Dollar amount spending this holiday season appears consistent with last year:

  • 30% of consumers from all income ranges say they plan to spend between $250 and $500 this season
  • 20% say they’ll spend between $500 and $1,000
  • 6% will spend more than $1,000

Retail channel preference differs by household income. 17% of consumers say they are planning on increasing their online shopping this season and much of that traffic will come from households earning $100,000 or more per year. 20% of consumers in this group say they’re going to spend more online, compared with 15% among consumers in households earning $50,000 or less. In contrast, 12% of consumers in households earning $50,000 or less say they plan to spend more at dollar stores this year, flanked by just 4% of consumers in households earning $100,000 or more per year.

Consumers say they plan on giving gift cards, tech products, toys and food this year. They also say they are planning on spending more this year on food, clothing, video games and cookware.

Top 10 2013 Holiday Gifts

Rank

Gift

1

Gift Cards

2

Tech Products

3

Toys

4

Food

5

Apparel

6

Video Games

7

Cookware

8

Sporting Goods

9

Jewelry

10

Alcoholic Beverages

Source: Nielsen, November  2013

The report says beer, liquor and wine will drive between $60 million and $70 million in sales growth. Traditional seasonal fares such as cheese, jams and jellies should also see jumps in sales, while snacks and candy will drive $199 million and $95 million in sales, respectively. The report expects continued growth in pet care (5.3% dollar growth, 0.3% unit growth) and pet food (1.4% dollar growth, 0.4% unit growth).

Consumers are also expected to lean toward healthy options this holiday season, opting for bottled water and juices over carbonated beverages and shelf-stable juices. Health conscious consumers are expected to lift vitamin sales this holiday season, driving strongest value growth ($91 million) in the department (5.8% dollar growth, 5.2% unit growth). The report forecasts strong value growth from fresh produce (8.2% dollar growth, 1.6% unit growth), while canned vegetables will likely see more than 2% dips in dollar and unit sales.

Nielsen publishes its holiday spending forecast annually and is a reliable indicator of actual holiday spending results. In 2012, five out of five category trends as well as the highest performing category were successfully predictedby Nielsen. Across four key categories, there was less than a 1 point difference between the Nielsen forecast and the actuals.

For more information about the Nielsen study, please visit here.

 

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