Uncertainty about the economy is causing cost-conscious consumers to scale back their spending plans for the upcoming holiday season, according to new research.
Nearly half (49 percent) of consumers are heading into the holidays concerned about the economy, said researchers in their SymphonyIRI Group special report on holiday shopping in 2010. Nearly 60 percent of consumers plan to spend less than $500 on holiday gifts this year and 28 percent plan to purchase fewer gifts.
Celebration around the wassail bowl will also be more restrained this season. The report said that 25 percent of consumers will trim back spending on holiday celebration-related food and beverages.
But the Grinch hasn’t completely foreclosed on the holidays. Consumers still plan to maintain festive traditions by continuing their holiday celebrations and buying gifts for friends and loved ones, just on a more frugal scale.
In spite of tight budgets, 60 percent of consumers said they will purchase “very nice” gifts for the holidays, but do what they can to keep costs down, the report said. But there will be an increase in the number of consumers who plan to budget no more than $199 this year on gift shopping .
“The bright spot here is that consumers do not plan to completely halt their spending despite a lack of confidence in the economy and concerns about their immediate financial futures,” said Susan Viamari, editor of SymphonyIRI’s report.
And across the board, consumers will be savvier shoppers this season. They will enter stores with shopping lists in hand and will have done their homework in trying to scout out the best deals, the report said. Nearly three-quarters of shoppers plan to compare products on the Internet and nearly half will try to take better advantage of in-store promotions and newspaper and circular coupons for gifts and holiday food and beverages.
For many consumers, cash will be king this season. A quarter of all consumers intend to use their credit cards less this year, opting instead to pay with cash (20 percent) or use debit cards (18 percent).
“The economy continues to transform, and with that, consumers are evolving,” said John McIndoe, SymphonyIRI’s vice president of marketing. “As a result, today’s retail environment is even more complex than we have seen historically.”
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