ARG/UBS Survey: Retailers Face Bleak Christmas Season

November 19, 2008  by in UnCategorized   

By Home Furnishings Business in Furniture Retailing on November 2008 With almost three-quarters of American consumers feeling at least some pressure from debts, retailers shouldn’t expect a merry Christmas this year. That’s according to the first of six Christmas shopping season surveys from America’s Research Group/UBS.

According to the survey, released Thursday, only 63.9 percent of Americans feel truly secure in their job, while 22.8 percent already have seen layoffs at their workplace, and 31.8 percent expect layoffs in the future. At the same time, more than half of American consumers (52 percent) feel some pressure from debts, and 21.8 percent feel a lot of pressure.

Of those feeling pressure from debt, 57.9 percent will spend less this Christmas due to their credit concerns.

“Consumers have snapped shut their wallets this year, and it’s difficult to find a bright spot for the Christmas shopping season,” said C. Britt Beemer, chairman of ARG, the Charleston, S.C.-based research firm specializing in consumer behavior.

UBS Global Equity Research teamed with ARG for six surveys this Christmas season, the next scheduled over Black Friday weekend. This week’s survey consisted of 1,000 telephone interviews of adults 20 to 59 years of age conducted Thursday and Friday, Nov. 13 and 14. The error factor is plus or minus 3.8 percent. According to an announcement of results, Beemer has correctly predicted Christmas retail sales in 16 of the last 17 years.

The survey indicated that gift cards, a bright spot for retailers last year, will suffer this season because consumers worry that stores could go into bankruptcy and not honor the cards. Of those consumers who normally give gift cards but won’t this year, 64.4 percent will give money instead. Only 35.6 percent said they would give gifts instead, dashing retailers’ expectations that fewer gift cards could boost gift sales. Of those consumers who will give fewer gift cards, more than a third (36.4 percent) say that there is a chance they could give nothing at all.

Christmas shoppers will be more bargain-conscious than ever, which 84 percent saying they are more sales-driven than they were three to five years ago. Almost 90 percent (89.2 percent) of consumers say they are either some (55.6 percent) or very much (33.6 percent) driven by sales and discounts.

The top-rated sales promotions are:

• 50 percent off (41.9 percent of consumers)

• Take an additional 20 percent off (28.6 percent of consumers)

• Save 40 percent to 60 percent (27 percent of consumers)

• Buy one, get one free (24 percent of consumers).

Ladies’ specialty stores are at risk, according to Beemer. Of women, 36.3 percent do not shop at ladies’ apparel specialty stores at all. Of those who do, 26.2 percent will spend less this Christmas season at those stores.