With the holiday season going strong I think it’s an important time to look at how much Americans are spending this year. As I’m sure you’re aware, the Christmas season is the most important time of the year for the retail industry. Many companies operate “in the red” (loss) for most of the year and only go “in the black” (profit) on Black Friday, which is the start of the holiday season.
A recent survey of approximately 4,000 Americans about their holiday habits found that more than 90% plan to observe Christmas. If consumers spending heavily since Black Friday are any indication, retailers will have a happy New Year. The latest available numbers indicate shoppers spent $6 billion online the week of Cyber Monday.
Unemployment, foreclosures, health issues, rising food costs, and worries about winter utilities don’t appear to be the concern they were in years past. It’s surprising to see so much being spent on twinkling lights, door decorations, etc., but with overall Christmas spending predicted to be strong, it’s a boon for stores. A key factor that points to the reality of tough economic times is the more than 41% of consumers who reported that sale and price discounts are the most important factor when holiday shopping this season, although it was higher at 43.3% in 2009.
Every year the National Retail Federation (NRF) predicts the upcoming shopping season by conducting surveys with consumers. The results indicate that consumers have dropped their projected spending over the last six years from a high in2006 of $573 to this year’s planned giving of $515.
But if you’ve noticed an increased trend in decorating for holidays, you’d be right as spending on holiday décor is at its highest this year with the average consumer expecting to spend nearly $47; Christmas food budgets have also peaked this year at $96.75. The NRF estimates the average person will spend $700 to put gifts under the tree this year.