U.S. shoppers say they’re being cautious with their holiday spending this year despite recent signs of economic growth.
The average prediction for the total amount Americans will spend on Christmas gifts this season is now $740, midway between the $786 they estimated in October and the $704 predicted in November, a Gallup survey said.
The December prediction comes less than last year’s $770 and is well short of consumers’ spending intentions before the 2008 financial crisis.
Gallup said modeling of the latest spending estimate, which was based on a Dec. 5-8 poll, suggests holiday sales will increase 2.3 percent to 2.7 percent this year compared to 2012. Slightly higher than the range Gallup reported last month based on November statistics.
Annual changes in Gallup’s November and December forecasts have roughly paralleled changes in holiday sales, Gallup said Thursday.
Gallup says the numbers suggest consumers are still in a recessionary mindset despite the recent stock market gains and reports of improved economic growth.
The National Retail Federation said November retail sales, excluding automobiles, gas stations and restaurants, increased 0.6 percent seasonally adjusted month-to-month, and 3.9 percent unadjusted year-over-year. Thursday’s report was consistent with NRF’s holiday sales forecast of 3.9 percent growth, the retail trade association said.
“Consumers took advantage of a very promotional holiday season to shop at their favorite retailers during the Thanksgiving weekend,” Matthew Shay, NRF president and chief executive officer, said in a statement. “Consumer confidence and sentiment are steadily improving, but spending remains at a modest pace. While it seems that the economy is improving, the future remains far from certain.”
With categories such as automobiles, gasoline stations and restaurants added back in, November retail sales increased 0.7 percent seasonally adjusted month-to-month and 4.7 percent adjusted year-over-year, the U.S. Census Bureau said.
A holiday spending budget is one way consumers say they plan to keep spending in check this year although sticking to it isn’t always easy. A survey conducted in October by Wakefield Research for Capital One found 74 percent of Americans were planning to make a holiday spending budget but nearly half (49 percent) said they weren’t sure they would be able to stick to it.
“Look at your monthly budget and figure out how much you can realistically afford to set aside towards holiday gift giving, without going into debt,” Capital One spokeswoman Vera Gibbons advised. “Your intentions may be good, but if you’re spending money you don’t have, prepare for a credit card bill that could take months if not years to pay off.”
Ideas to help stay on budget include making a list and sticking to it. Gibbons, a personal finance analyst, suggests determining price points for each person, setting a firm “no more than” purchase price for the gift.
If disposable income is tight, winnow the list down by designating some people as “card only” or consider making — or baking — a gift. “Seventy percent of Americans will DIY something this holiday season and gifts from the heart — like gifts that the kids make — are always appreciated,” Gibbons told UPI.
Who gets cut from the gift list if consumers go over budget? Thirty-two percent said they would cut friends from their gift list. The boss came in second (26 percent). Only 7 percent said they would leave their parents off the list if they’re running short on funds.
Take advantage of the Internet. Signing up for promotional emails from retailers and using social media can payoff in coupons and free shipping offers while using the Internet to compare prices before heading out to the store can save time, money and the cost of gasoline.
Avoid last minute shopping, which can result in consumers making unneeded additional purchases because they’re feeling rushed and frenzied, the NRF said.
Also, consider shopping after 6 p.m. the evening before a sale is advertised to begin.
“Many retailers program the registers the night before, so the sale may already come up in the register even if they have not changed out signs on the selling floor yet,” the NRF website said.
Source: United Press International