The NPD Group Tuesday added to the growing body of evidence suggesting that holiday spending will decrease this year — or, at best, be flat.
This story first appeared in the October 15, 2008 issue of WWD. Subscribe Today.
The Port Washington, N.Y.-based market research firm, in a report subtitled “It’s Holiday on Sale,” said that, in a survey conducted last month, 26 percent of respondents expect to spend less this holiday, up from 18 percent last year.
Marshal Cohen, chief industry analyst at NPD, said the change in intentions “illustrates that consumers are already focused on the idea of spending less.”
While the percentage of those expecting to spend more remained the same as last year — at 11 percent — those who anticipate spending “about the same” declined to 63 percent from 70 percent.
For the first time, Cohen predicted that holiday expenditures would be flat or lower than in the prior year. The poll incorporated the responses of 2,030 respondents answering from Sept. 8 to 16, the day before the credit crisis led to across-the-board declines in retail stocks.
Those expecting to use credit to purchase holiday gifts fell to 26 percent from 28 percent a year ago. Sixty percent of those surveyed said either a “special sale price” or “overall value for the price” will influence where they shop this holiday. Reliance on sales events also is due to a lack of a must-have item, Cohen noted.
At 49 percent, apparel topped the list of items consumers plan to buy as gifts, followed by toys and movies, at 37 and 29 percent, respectively. Also making the top 10 were accessories, ranked seventh at 20 percent, and fragrances, 10th at 17 percent. Books (27 percent), electronics (23 percent), video games (22 percent), music (20 percent) and food (17 percent) were the other categories in the top 10.
Cohen said the fashion industry could be doing more to help its cause. “This is the least technically advanced industry these days. Add in a lack of color and style changes, and there truly is no excitement being generated. Apparel will be hard-pressed to keep its number-one ranking as most-often-given gift,” he said.