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Consumers to Take Conservative Approach to Holiday Shopping, According to NRF

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For Immediate Release
Contact: Kathy Grannis (202) 783-7971 or grannisk@nrf.com

Consumers to Take Conservative Approach to Holiday Shopping,
According to NRF's First Holiday Survey

Washington, October 16, 2007 -- Though shoppers still plan to spend more on the holidays this year than last, consumers say their spending will be a bit restrained this holiday season. According to NRF’s 2007 Holiday Consumer Intentions and Actions Survey, conducted by BIGresearch, U.S. consumers plan to spend an average of $816.69 on holiday-related shopping. In addition, these shoppers will spend an additional $106.67 on special “non-gift” purchases by taking advantage of special promotions and discounts to treat themselves.

“Shoppers will be a little more conservative with their spending as they become more aware of the softness in the economy,” said NRF President and CEO Tracy Mullin. “It is safe to say that many retailers will be competing on price, causing this holiday season to be very promotional - a tremendous win for consumers.”

While the traditional kickoff to the holiday season is Black Friday, most people won’t wait to begin bargain hunting. This year, 40.3 percent of shoppers will begin holiday shopping before Halloween.

“Although the day after Thanksgiving remains the official kickoff for holiday shopping, consumers are out in the stores far earlier looking for holiday gifts,” said Phil Rist, Vice President of Strategy for BIGresearch. “Retailers that are promoting holiday merchandise are responding to the needs of their shoppers, who are already looking to purchase greeting cards, wrapping paper and a variety of gifts.”

Though consumers plan to shop at a variety of stores this year, no particular format will see significant traffic gains from last year. Discounters can expect the most traffic as 68.4 percent of consumers plan to shop there (compared to 70.3% in 2006). Department Stores will also see a lion’s share of traffic as 58.2 percent will choose this format (vs. 61.6 percent last year). Other popular destinations include grocery stores (44.6% in 2007 vs. 49.3% in 2006) and online (44.3 percent in 2007 vs. 47.1% in 2006).

The Internet will once again play a crucial role for retailers this holiday season as consumers, on average, plan to do 30.2 percent of their shopping online compared to 28.9 percent in 2006.

As expected, most holiday budgets will be allocated to gifts, with the average person spending $469.14 on family, $90.13 on friends, $22.79 on coworkers, and $37.45 on other people like clergy, teachers, and babysitters. The survey also found that most Americans plan to increase spending on flowers ($20.53 vs. $18.98 last year) and decorations ($49.76 vs. $46.49 last year). Consumers also plan to spend $94.69 on candy and food and $32.21 on greeting cards and postage.

There will be plenty of popular items on consumer wish lists this holiday season, but the most sought-after category appears to be the most practical: gift cards.  This year, more than half (53.8%) of consumers want to receive a gift card or gift certificate as a holiday gift, though they won’t be the only item on shoppers’ wish lists. Consumers also want everything from clothing and accessories (50.1%) to books, CDs, DVDs, videos and video games (50.8%).

Other popular categories include consumer electronics or computer-related accessories (36.4%), jewelry (23.8%) and home décor or home-related furnishings (22.0%).

Though shoppers choose to buy in stores for a variety of reasons, two major factors will be driving consumer traffic this holiday season. The majority of shoppers continue to say that everyday low prices (12.8%) and sales or price discounts (38.2%) bring them into the stores. Though this will be a promotional holiday season, other factors like customer service (4.9%), product quality (12.8%), and merchandise selection (22.6%) will help retailers drive traffic. Additionally, 6.3 percent of shoppers said they choose to shop at stores with the most convenient location.

NRF continues to expect holiday sales to increase 4.0 percent to $474.5 billion.

The NRF 2007 Holiday Consumer Intentions and Actions Survey was designed to gauge consumer behavior and shopping trends related to the winter holidays. The survey, which polled 7,837 consumers, was conducted for NRF by BIGresearch from October 2-9, 2007. The consumer poll has a margin of error of plus or minus 1.0 percent.

BIGresearch is a consumer market intelligence firm that provides unique consumer insights that are gathered online utilizing very large sample sizes. BIGresearch’s syndicated Consumer Intentions and Actions survey monitors the pulse of more than 7,000 consumers each month to empower its clients with unique insights for identifying opportunities in a fragmented and changing marketplace.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees - about one in five American workers - and 2006 sales of $4.7 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com