Holiday Spend Outlook: 'Tis The Season To Be Gloomy

While most Americans have yet to decide what kind of candy they'll pass out to this year's trick-or-treaters, the annual holiday-sales prediction season has kicked off. And--at least in the early going--most forecasters are leaning slightly more toward Ebenezer Scrooge than Tiny Tim.

Based on its first survey of holiday shoppers, the National Retail Federation says consumers plan to be conservative and restrained, spending only slightly more than they did last year.

"U.S. consumers plan to spend an average of $816.69 on holiday-related shopping, and an additional $106.67 on special "non-gift" purchases, taking advantage of special promotions and discounts to treat themselves," NRF says. "This brings total planned holiday-related spending to $923.36, up 3.7% from 2006."

Because shoppers are worried about a soft economy, NRF says they are likely to be motivated by prices, making the holiday season more promotional than Christmases past.

Discount and department stores will still get plenty of traffic, but less so than last year. Some 68.4% of consumers say they will shop at discount stores (down from 70.3% in 2006), and 58.2% of shoppers plan to shop at department stores (down from 61.6% last year.) And shoppers say they plan to do 30.2% of their shopping online, compared with 28.9% last year.

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When they will do their shopping, however, is a matter of some debate. While the NRF survey finds that 40.3% of shoppers say they plan to start before Halloween, a study released recently by NPD Group predicts the opposite. The Port Washington, N.Y.-based market researcher says 41% of the consumers in its survey won't start shopping until after Thanksgiving--a 10% jump in late shoppers from last year.

NPD also notes that the popularity of these gift cards has hurt other retail segments, especially impulse buying. "In past years, impulse purchases have accounted for 26% of holiday sales. In 2006, that figure dropped to 19%, this year we'll be lucky to hit 17%," NPD says in its release.

The NPD research finds that most shoppers are working with the same budget this year as last, with only 5% saying they intend to spend less.

Some industry predictions, though, are more festive than a bowl of punch. In a survey for Women's Wear Daily, based on data from 42 retailers, the Macerich Co. estimates that sales will jump 9% for the fourth quarter, and 8.8% for the year--"about twice as high as what some analysts have been suggesting."

The survey included retailers at the high end (Burberry, Coach and Tiffany) as well as the low (Linens-N-Things, Staples and Chick-fil-A.)

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