A record number of consumers say they are pessimistic about the economy. Over half of the respondents (53%) say they expect the economy to weaken next year, the highest in more than 10 years of asking this question, compared with 43% last year.
Categories in which spending is likely to be down the most from last year are
Consumers also said they would buy fewer gifts this year, 21.5 gifts on average compared with 23.1 gifts last year, and they will spend an average of $532 on gifts this holiday season, down 6.5%.
Stacy Janiak, Deloitte's U.S. Retail Leader, says "... consumers appear to be reining in their non-essential holiday spending, while trying to preserve the tradition of gift-giving and the spirit of the holidays."
According to the report, 73% of consumers said the best value for the money will cause them to shop a particular retailer this season, and 72% said low prices. More consumers say they will shop at venues such as discount/value department stores, warehouse clubs, dollar stores, outlet stores, and off-prices stores. Drug stores and supermarkets also showed big increases from last year. In addition, flea markets (7%) and re-sale/used merchandise stores (6%) were cited as destinations by consumers.
Janiak notes that "... price-oriented retailers have an edge in this environment, as well as an opportunity to enhance their market share and positioning... (and) will likely not be penalized for their leaner staffing levels since consumers are focused on value rather than on other factors, such as customer service."
The report highlights that for the fifth straight year, gift cards are expected to be the top gift purchase. 66% of consumers surveyed plan to buy them, just slightly below last year's 69% of consumers. Holiday shoppers are also planning to buy fewer cards on average: 5.3 cards this year, compared with the 5.5 cards they planned to buy last year.
Gift cards for stores/products, though, are less popular, says the report: only 47 percent of consumers plan to buy them, compared with 54 percent last year. But, gift cards for gasoline increased to 17 percent from 13 percent, another sign of this year's focus on necessities.
23% of respondents, however, are concerned about the store closing before they can use a card, and 24% have had at least one card expire before they could use it.
Janiak concludes that "... we could see a higher gift card redemption rate in January... (because of) the growing number of unused gift cards... (and) the current economic environment."
For the complete summary, and links to more data from Deloitte, please visit here.