You know times are tough when a report headlined "Holiday Cheer Makes a Comeback" goes on to report that the average number of gifts people buy and the average amount they spend on them is expected to be even lower this year than it was in the dismal holiday-shopping season of 2008. But that's what we find in a Deloitte report released this week, based on polling conducted in late September and early October.
The report opens by saying Americans "are more optimistic as the holiday shopping season kicks off," and it goes on to cite the finding that 54 percent of respondents expect the economy to improve next year.
But then the well-worn other shoe drops: "Despite expectations for economic improvement, consumers continue to reduce their spending on gifts." On average, respondents said they expect to buy 18.2 gifts this holiday season, down from 21.5 last year and from 23.1 in 2007. (Who'd have thought at the time that 2007 would be seen in retrospect as a kind of golden age?)
Deloitte's polling also found a decline in the amount of money respondents expect to spend on gifts. The average in the new survey is $452, vs. $532 last year and $569 the year before that.
However, the report does finally live up to its "comeback" billing when it adds in holiday spending for things other than gifts, including "socializing away from home, entertaining, non-gift clothing and home/holiday furnishings." When these anticipated expenditures are included, total expected holiday spending averages out to $1,145 per respondent, a healthy 16 percent increase from last year's figure.
As other recent polling has found, consumers will be expecting to see bargains when they do their holiday shopping. Seventy-four percent said they'll buy items that are on sale, and 57 percent plan to buy lower-priced goods. Fifty-four percent intend to use more store coupons. Among those planning to buy electronics or toys, nearly four in 10 expect to find discounts of 50 percent or more. And among apparel shoppers, nearly half expect to find such discounts. Deloitte suggests they may come away disappointed, as retailers have been cautious about inventory this year and will not be in such a hurry to slash prices.
News this week that the economy grew by 3.5 percent in the third quarter would seem likely to loosen consumers' grip on their wallets during the holiday-shopping season. But an ABC News/Washington Post poll earlier this month found general disbelief that the recession has ended. One question had a preamble saying, "Many economists say that using the standards they apply, the recession probably is over." It then asked respondents to think about "your own experience of economic conditions" and say "from your point of view" whether the recession is over or not. Just 16 percent said it is over, vs. 82 percent saying it's not. And 60 percent said they're worried (including 23 percent "very" worried) about "your own family's financial situation."
One further wild card: Gas prices, to which consumers are highly sensitive, have been rising briskly in recent weeks. By contrast, the price of a gallon of gas had fallen sharply going into last year's holiday-shopping season and was well under $2 by Thanksgiving. According to this morning's data on the AAA’s Daily Fuel Gauge Report, a gallon of regular costs $2.695 on average, up from $2.479 a month ago. A year ago on this date, it was $2.547 and sinking fast.
— Nielsen Business Media