Washington, October 22--Consumers have once again found a little extra money to add to their holiday budgets this year, according to the findings of a new National Retail Federation (NRF) survey. The NRF 2004 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch for NRF, found that the average consumer plans to spend $702.03 on the holidays, up 4.5 percent over last year. Total holiday spending this year is estimated to reach $219.9 billion.
The consumer survey reinforces the 4.5 percent increase in holiday sales that NRF forecast in mid-September, which was based on economic data. The holiday season, which generally accounts for nearly one quarter of the retail industry's sales in any given year, can make or break a retailers annual performance.
"Retailers can be encouraged that consumers have been planning ahead for the holidays," said Tracy Mullin, president and CEO of NRF. "Shoppers won't let higher gas prices and rising interest rates steal Christmas this year."
Shoppers will be spending their holiday budgets on a variety of merchandise. This year, average consumers will spend the bulk of their holiday budget on gifts for family ($406.52) and friends ($71.29). Consumers will also spend $22.12 on co-workers and $41.10 on other people, including babysitters, teachers, and clergy. Other items consumers will purchase include decorations ($35.91), greeting cards and postage ($25.22), candy and food ($83.77), and flowers ($16.10).
In addition to purchasing gifts, many consumers have added their own names to the shopping list. More than half of consumers (51.2%) plan to take advantage of sales this holiday season to make non-gift purchases for themselves or their families, spending an additional $89.25 on those purchases. Overwhelmingly, men and young adults plan to spend the most on themselves ($116.87 and $114.69, respectively).
"Consumers want to reward themselves for a job well done and the savviest shoppers know that this is the best time of year to find great deals," said NRF president and CEO Tracy Mullin. "Retailers would be wise to acknowledge that some shoppers feel they deserve a little something for themselves."
Shoppers have also been thinking about what they would like to receive this year. As usual, books, CDs, DVDs, videos, and video games held the highest ranking, with 53.1 percent of consumers hoping to receive something in that category. Clothing and clothing accessories also continue to rank high with shoppers at 50.6 percent. The largest jump this year came in gift cards, with more than half of consumers (50.2%) wanting to receive a gift card, up more than ten percent in two years. Other items on consumers' wish lists include consumer electronics (32.6%), jewelry (22.6%), and home décor (21.3%).
Many retailers have been placing greater emphasis on customer service this year, but the majority of consumers still say that sales or price discounts (41.8%) or everyday low prices (15.6%) are the most important factors when choosing to shop at a particular store. Other consumers shop at stores based on their selection of merchandise (20.0%), quality (8.7%), or location (7.8%). Though only 4.4 percent of consumers said that "helpful, knowledgeable customer service" was the most important factor when choosing where to shop, it is increasing in importance. Just two years ago, only 3.1 percent of consumers said that customer service was the most important factor in shopping.
"Though many consumers still want to hunt for the best deal, they are beginning to pay more attention to the shopping experience," said Phil Rist, Vice President of Strategy for BIGresearch. "Sales will bring a customer in to the store, but great customer service will keep them coming back."
