US consumers will spend less this holiday season due to continuing economic uncertainty and having become used to doing more with less, according to the National Retail Federation's (NRF) holiday consumer spending survey.
NRF is forecasting holiday sales will increase 3.9 percent to $602.1 billion.
While 36.1 percent of those surveyed said they wanted to receive electronics gifts for the holiday, 23.3 would like to receive jewelry.
“Though the foundation for solid holiday season growth exists, Americans are questioning the stability of our economy, our government and their own finances,” said NRF President and CEO Matthew Shay. “We expect consumers to set a modest budget for gifts and other holiday related purchases as they wait and see what will become of the U.S. economy in the coming months.
“Retailers have urged Congress and the Administration to seek a long-term solution for funding the government and extending the debt ceiling instead of kicking the can down the road once again. A band-aid approach is not the answer. Americans deserve to feel good about spending their hard-earned money on gifts for others, and this holiday season it’s evident some could second-guess their spending,” continued Shay.
Holiday shoppers were asked if the political gridlock in Washington around U.S. fiscal concerns would affect their holiday spending plans. On average, 29 percent of respondents said the situation would somewhat or very likely affect their spending plans. Nearly one-third (32.7 percent) of those between the ages of 55 and 64 said political gridlock in Washington was somewhat or very likely to affect their spending, the highest percent among all age groups surveyed.
When asked specifically about the overall state of the economy and how it would affect their spending plans, more than half (51.0 percent) of consumers said the economy would in some way impact how they spend this holiday season. Specifically, 79.5 percent plan to spend less overall, looking to cut corners and tighten budgets where they can.
Consumers will cut back on self-gifting, spending an average of $129.62 this year, down from a survey high of $140.43 last year and $137.17 in 2011.
“Consumers have had years of practice when it comes to managing tight budgets while still spending on items they need to, whether it be gifts or groceries for the family,” said Pam Goodfellow, Director of Prosper Insights Consumer Insights which carried out the survey. “Retailers can expect to see practical and refined attitudes from their customers this holiday season as families make thoughtful decisions about what they need to buy and what they can pass on.”
Just over 41.0 percent of consumers will begin holiday shopping before Halloween, while 38.8 percent will begin in November, and 16.0 percent only plan to start shopping in the first two weeks of December, while 3.9 percent will shop in the last two weeks of the month.
More than half of shoppers (51.5%) will buy online. Whether comparison shopping or looking for deals on their mobile devices while out, the Internet will play a crucial role for retailers and shoppers this year, the NRF survey found.
The average person will complete about 39.5 percent of their shopping on retail and other company websites, up from 38.8 percent last year and the highest amount in the survey’s history. Shop.org, NRF’s digital division, is forecasting online holiday sales will grow 13-15 percent to as much as $82 billion.
More than half (56.3 percent) of holiday shoppers say they own a smartphone, and more than one-third (34.0 percent) own a tablet – both significantly higher than this time last year. Of those who own a smartphone, 53.8 percent will use their device to look up store hours, compare prices and purchase products, and 63.2 percent of tablet owners will use their device to shop, compare prices and look up product information.
