NRF Forecast Strikes an Optimistic Tone

WASHINGTON Consumers might be a little more willing to spend on discretionary items this holiday season, according to a survey released last week by the National Retail Federation here. The survey, conducted among 8,767 consumers Oct. 5-12 by BIGresearch, Worthington, Ohio, projected average consumer spending of $688.87 this year, vs. average spending of $681.83 last year. The poll found that 61.7%

WASHINGTON — Consumers might be a little more willing to spend on discretionary items this holiday season, according to a survey released last week by the National Retail Federation here.

The survey, conducted among 8,767 consumers Oct. 5-12 by BIGresearch, Worthington, Ohio, projected average consumer spending of $688.87 this year, vs. average spending of $681.83 last year.

The poll found that 61.7% of shoppers said the economy would impact their spending, down from 65.3% who said that a year ago. The survey also found that while sales or price discounts remain the most important factor for shoppers (41.8% ranked this as the most important factor), customer service and product quality rose in importance as factors for shoppers this year. Customer service was cited by 5.3% as being most important this year, vs. 4.4% last year, and product quality was most important to 12.7% of respondents this year, vs. 11.8% last year.

“We think retailers will have a bit of breathing room to focus on things other than price,” said Ellen Davis, vice president, NRF, in a conference call discussing the survey.

The survey also reported a decline in the number of people who will make a holiday purchase from a discounter this year (65.1% vs. 70.1% a year ago). Grocery stores were cited by 46.7% of consumers as holiday shopping destinations.

NRF maintained its forecast of a 2.3% increase in holiday spending this year — one of the more optimistic projections for holiday spending that have emerged in recent weeks, although each uses slightly different parameters for what is included in holiday spending.

As reported in an article on Page 18 of the Oct. 11 issue of SN, data-tracking firm Nielsen and consulting firm Accenture both projected flat holiday spending this year, compared with last year.

NRF conceded that “Americans are still not ready to declare an end to the recession,” despite its official end last year, but suggested that consumers have shifted their mindsets slightly compared with a year ago in terms of their willingness to splurge for the holiday season.

“Fundamentals are out, fun is in,” said Davis. “Last year we saw a focus on practical gifts. This year we will see more discretionary purchases — it's not all about the basics.”

Consumers have also shifted from a mindset of focusing strictly on price to one in which value is viewed more holistically, she said. As an example, she cited a digital photo frame that holds twice as many images but only costs 20% more than a cheaper version might be viewed as more appealing this year — representing a shift away from focusing merely on price that has intensified in the last few months.

Other trends cited for this year's holiday season included:

  • An increase of 8% in the number of consumers who said they are willing to shop for themselves this holiday season, to 57.1% of consumers this year.

  • Men are likely to spend about $20 more on average than women, and, as always, they are expected to do their shopping much later in the season than women.

  • Online shoppers spend more than brick-and-mortar shoppers — about 25% more this year, the survey projected. These e-shoppers will spend about $850 per person, and are also more likely to shop early and to shop for themselves.

  • More than a quarter — 26.8% — of consumers with smart phones will use the devices to research or make holiday purchases, a number that jumps to 45% among consumers age 18-24.