Friday, December 18th, 2009
By Karen Talley
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)—The burst of Christmas buying may already be over, according to new research findings, casting doubts on whether retailers will be able to have a better holiday season than last year.
Consumers with larger incomes have already finished much of their shopping, while those with less money are still holding back to a large degree, based on research released this week.
The developments suggest that holiday spending could slope down from here as more people go to stores but spend less.
“People with more money and who are more secure about their jobs took advantage of early deals,” said Bill Pecoriello, chief executive of Consumer Edge Research. “Those who are unemployed or underemployed are waiting in hopes of even better prices.”
Consumer Edge found that the amount of money shoppers plan to spend on gifts this year dropped to $402 as of the end of November from $440 the month before. Just over 10% of adults expect to spend more this year than last year, compared with 14% the prior month, Consumer Edge said.
Pecoriello attributes the scalebacks to a higher proportion of lower-income shoppers starting the bulk of their buying and consumers with bigger incomes being further along or even done with their purchasing.
The households that are starting to shop are likely those with less than $40,000 in annual income, Pecoriello said.
This group plans to spend $215 this year and represents the largest slice of consumers in the U.S., at 44% of households, Consumer Edge said.
Households with $80,000 to $150,000 expect to spend $614, while those with incomes above $150,000 plan to spend $1,060, the firm said.
The National Retail Federation said Wednesday that about half of consumers have finished their holiday shopping and the majority of those still planning to spend will do so in discount stores and department stores. Online, which is also a low-price venue, is the next top destination.
Electronics stores, which reported brisk sales over the Black Friday weekend, will see less than one-quarter of those who still have shopping to do, the National Retail Federation said.
Mike Duke, chairman of discounter Wal-Mart Stores Inc. (WMT), has said that he expects the store’s customers to shop late in the season.
The National Retail Federation expects holiday sales to fall 1% to $437 billion this year compared with 2008, as 84% of consumers plan to spend less this season.
-By Karen Talley, Dow Jones Newswires; 212-416-2196; (JavaScript must be enabled to view this email address)
