Deloitte: Consumers to spend more this holiday despite mixed view on economy
NEW YORK Deloitte's 25th annual holiday survey of consumer spending intentions and trends found that 66% of consumers surveyed indicate their financial situation is the same or better compared with this time a year ago, and 62% plan to spend the same or more on the holidays compared with 2009. However, 50% of consumers feel the economy is either in a recession or heading back into one.
Despite the mixed view, one group of consumers -- the $100,000 and higher income bracket -- is leading the upswing in sentiment with nearly half (45%) of households feeling the economy will improve next year, compared with 39% of all other survey respondents, Deloitte reported. Additionally, more than half (52%) say their job is extremely or very secure, 10 percentage points higher than the survey average. This group is also planning to splurge the most on the holiday season, spending a total of $826 on gifts this year, 77% higher than all survey respondents.
"Consumers who are feeling secure in their financial situation appear more willing to engage in some retail therapy, satisfying some pent up demand," said Alison Paul, vice chairman and retail sector leader for Deloitte LLP. "At the same time, there are households that remain focused on necessities due to a job loss or other issues impacting their incomes. Other consumers report an improvement in their personal finances, yet remain cautious about the economy."
Deloitte found that consumers aged 45 to 60 years were more concerned about the economy. Four out of 10 (40%) respondents indicate their household financial situation is worse compared with last year at this time, compared with 35% of overall respondents. The highest number of respondents who said they will spend less this holiday season (46%) and that they have permanently cut back on the amount of money they spend (41%) came from the 45 to 60 years old age group.
Conversely, the 18 to 29 years old age group is ready to revisit retailers this holiday season after closely managing their finances, with nearly 37% citing careful spending throughout the year as a reason they're hoping to spend more on the holidays, Deloitte found. While their expected gift spending is lower than other age groups, they may make it up in non-gift spending plans as they expect to spend 50% more than the average on entertaining at home, non-gift clothing, socializing and home/holiday furnishings combined, bringing their total holiday spend on gift and non-gift items to $1,394, compared with an average of $1,160 among all survey respondents.
In addition to gauging holiday spending intentions in the 25th Annual Holiday Survey, Deloitte said it asked consumers to share their views on the most significant shopping changes in their lifetimes. In response, consumers frequently cited the Web's influence on their shopping. Almost half of consumers (46%) said that today they are smarter about prices as a result of comparison shopping online. Nearly four out of 10 (37%) indicate shopping is simpler because of the ability to shop in stores and online to find items they want. Also, 25% of consumers said the ability to check online recommendations from others has given them more confidence in buying a product.
"Among all the innovations over the years, respondents appear to value consumer technologies that provide convenience, simplicity, and access to information to empower them as shoppers," continued Paul. "Today's connected consumer is a precise and demanding consumer. Retailers that understand shoppers' priorities and can provide consistent product, assortment and service across multiple channels will likely better engage consumers this holiday season and beyond."