Consumers in Cost-Conscious Mood for Holidays

November 23, 2008  by in UnCategorized   

By Home Furnishings Business in on November 2008 U.S. households are expected to spend an average of $418 on gifts during the holiday season, down from last year’s estimate of $471, The Conference Board reported Friday.

The survey, conducted in November by TNS of Christmas gift-spending intentions, covers a nationally representative sample of 5,000 U.S. households.

“Consumers are in a cost-conscious mood heading into the holiday season, and they intend to spend less this year than last year on gifts,” said Lynn Franco, director of The Conference Board Consumer Research Center. “This is shaping up to be one of the most challenging holiday seasons in years and it’s going to take more than the usual discounts and incentives from retailers to get  consumers to spend more freely.”

The top Christmas spenders will be East North Central households (Illinois, Indiana, Michigan, Ohio, Wisconsin), who intend to spend an average of $550. Lowest Christmas spending will be in the West South Central region (Arkansas, Louisiana, Oklahoma, Texas) where consumers intend to spend an average of $330 on Christmas gifts.

Only 27 percent of all households intend to spend $500 or more on Christmas gifts, down from 33 percent last year. Thirty-seven percent plan to spend $200 to $500, and 35 percent are planning to spend less than $200.

This year, 39 percent of all consumers will buy Christmas gifts on the Internet. Books top the list of online Christmas buying, with 38 percent saying they will buy books as gifts. Toys and games came in second with 36 percent of consumers intending to purchase these gifts online. Apparel and footwear rank third as online Christmas buying choices, followed by movie videos and DVDs.

Of the 41 percent who said they purchased Christmas gifts last year on the Internet, 94 percent said they were satisfied with their online buying experience.

Other key findings in The Conference Board survey:

• Households headed by individuals 65 and over intend to spend the most this season, with a $469 average spending budget.

• Households headed by those aged 35 to 44 intend to spend $419 on gifts.  

• Households whose incomes top $50,000 intend to spend $551 for Christmas gifts.