Consumers are feeling better about the economic recovery and are planning to spend more this holiday season than last, Deloitte, the major business services firm, says in its 24th Annual Holiday Survey. But at the same time, many consumers remain worried about job security and paying down debt.
What's this mean for retail sales?
The survey results "do not suggest a consumer who is ready to return to the strong spending levels of mid-decade," Deloitte said. "From an economic standpoint, many of the resources that fueled high spending have withered. And consumers themselves are now actively working on paying down their high debt levels. Still, the survey results do confirm that optimism is growing and concerns are receding."
Here's some of the nitty-gritty:
Economy: 54 percent of survey respondents said they expect next year's economy will improve. In last year's survey, only 28 percent expected things to turn around soon.
Holiday spending: 51 percent said they expected to spend the same or more than they did last year, up from 41 percent in last year's reading. Consumers expected their total holiday spending on everytning from gifts to home furnishings to rise 16 percent to $1,145. That's still significantly off of 2007's $1,237.
Worries: Consumers who expected to spend less because of gasoline prices, food prices, and volatile stocks were significantly less in number in this year's survey, compared to last year's.
Job security: Worries about job security rose this year, compared to last. In this year's survey, 35 percent of respondents said they expect to spend less because of a job loss or pay cut, up from 17 percent year last year. Forty three percent of respondents said they felt their job was extremly or very secure this year, down from 46 percent last year.
Meeting family needs: Respondents who said they'd buy things only to meet family needs went to 43 percent this year from 56 percent last year.
Gift spending: Expected spending on gifts is down 15 percent to $452 on average in this year's survey, down 29 percent from 2004. "Gift giving is likely in long-term decline partly because more consumers are buying closer to need for all household members," Deloitte said.
If not gifts, then what? Consumers expect to spend more on socializing away from home (up 34 percent to $243 on average); entertaining at home (up 49 percent to $201); non-gift clothing purchases for family members (up 62 percent ot $147); and home and holiday furnishings (up 113 percent to $102).
Which stores: Where consumers planned to shop at stores, discount department stores, web sites, and technology stores (electronics, office supply, computer stores) were the top three choices. Traditional department stores were a choice of only 23 percent of consumers, "roughly half of what it was earlier in the decade," Deloitte said. More than four in 10 - 42 percent - of respondents said they expected to shop online this year, compared to one in 10 a decade ago.
Popular purchases: For the sixth straight year, gift cards were ranked as the top choice of respondents, with 62 percent saying they expected to buy at least one. Clothing ranked second, and CDs/DVDs third.
Social media: 17 percent of consumers surveyed said they expected to use social media as part of their holiday shopping, and 19 percent said they expected to use a mobile phone. Among 18-29 year olds, that number was 39 percent, the survey said.
- Scott Nishimura, jobs and workplace reporter, Star-Telegram
(Photo: Ornaments at a Pier 1 Imports store)