The divisive presidential campaign is hurting retailers and has kept consumers conservative in their holiday spending budgets, according to the National Retail Federation.
“Everywhere you turn — whether you’re picking up a newspaper or watching television — political advertisements are taking up ad space that retailers typically use to get holiday shopping on the minds of consumers across the country,” NRF president and chief executive officer Matthew Shay said Thursday.
“Once the election has passed, we anticipate consumers will pull themselves out of the election doldrums and into the holiday spirit,” he added.
NRF’s annual survey of consumer holiday spending, conducted by Prosper Insights & Analytics, reveals that consumers plan to spend an average of $935.58 during the holiday season, compared to $952.58 last year, which was a record amount. The figures include spending for gifts, self-purchases, food, flowers, decorations and greeting cards for Christmas, Hanukkah and Kwanzaa.
The survey polled 7,733 consumers from Oct. 4 to 11, has a margin of error of plus or minus 1.1 percentage points, and didn’t get into people’s sentiments about the two candidates.
Consumers surveyed said they will spend $588.90 on gifts, and $207.07 for items such as food, decorations, flowers and greeting cards this year. Also, 58 percent of consumers plan to spend an average of $139.61 on themselves during the holiday season, compared to last year’s $133.74.
NRF officials said the survey reflects intended holiday spending and that intentions could change after the election.
Gift cards remain among the most sought after gifts. Sixty-one percent of those surveyed want them. Clothing and accessories represent the second most desired holiday gifts. Fifty-four percent of those surveyed want them.
Books, CDs, DVDs and videos are lower down on the wish lists, with 40 percent seeking those. NRF noted the drop is due to digital downloading.
Consumer electronics will be shopped by 32 percent of consumers; jewelry and home decor, 23 percent; personal-care and beauty items, 21 percent; sporting goods, 19 percent, and home improvement items, 17 percent.
“The election is a huge piece of it,” said Katie McBreen, an NRF vice president, explaining the drop in intended holiday spending. “We’re hearing it not just from consumers. We are hearing it from ceo’s in the stores talking to their customers each and every day. These are really unprecedented times. We never had an election season quite as negative as this one. It’s hard to not impact the psyche of people. Once this is over, consumers are going to get out and shop.”
“People are just being very, very cautious,” said Mark Mathews, NRF’s vice president of research development, industry analysis. “We believe once the election has passed that dynamic will shift. People will revert to their normal spending behavior.”
The results of the surveys were not surprising, Mathews added, noting that consumers have been “bombarded” by media coverage of the election making it difficult for retailers to get their messages out.
The NRF survey shows that the three top shopping destinations are department stores (57 percent), online (57 percent) and discount stores (56 percent). The survey found 45 percent plan to visit a grocery store/supermarket; 34 percent will shop clothing stores; 27 percent electronics stores, and 23 percent at small or local businesses.
Ten percent plan to visit outlet stores, but NRF officials said that figure could rise in future years based on the growing popularity of shopping off-pricers and outlets.
In a separate NRF flash poll conducted last week, more than a quarter of consumers said the election will impact their spending plans for the holidays. Forty-three percent said they are more cautious with spending due to the uncertainty of the election season.
The NRF also found that 87 percent of consumers could be convinced to spend an extra $25 this holiday season for a gift or something for themselves, if tempted by a good sale or promotion. The flash poll, conducted by ORC International Oct. 20 to 23, reached 1,021 consumers and has a margin of error of plus or minus 3.1 percentage points.
“Retailers should prepare for a rush of consumers in the weeks following the presidential election as they get more economic and political certainty and are looking to take advantage of promotions and deals that are too good to pass up for their friends, family and even themselves,” Shay said.
Online, 93 percent of shoppers will take advantage of free shipping; 47 percent will go for conveniences like buy online, pick up in store, or ship to store; 17 percent will seek expedited shipping, and 10 percent will use same-day delivery.
Forty-one percent of those surveyed said they started holiday shopping in October or earlier. The same percentage said they will start in November, and 18 percent will wait until December. Of the early shoppers, 63 percent say they are trying to spread out their budgets, while 49 percent want to avoid the crowds and stress of last-minute shopping. In recent years, retailers have really geared up for holiday shoppers after Halloween, stretching out the season.
Many shoppers, particularly Millennials, will wait till Black Friday or the last minute to buy holiday gifts, the NRF said. They anticipate bargains will be better as the season progresses.
The NRF will conduct another consumer survey in November, a third in December, and one for Black Friday, McBreen noted.
NRF officials indicated that the latest survey doesn’t contradict the association’s forecast back in early October that holiday sales, meaning those in November and December, will increase 3.6 percent to $655.8 billion, excluding autos, gas and restaurants. Officials explained the holiday forecast is based on an economic model integrating housing data, employment data, monthly retail sales and recent government estimates. It covers only November and December and looks at all retail spending, not just holiday spending, so for example, a self-purchase like a refrigerator would be factored in.
In contrast, the NRF-Prosper survey provides a snapshot of spending intentions for the full holiday season, which begins earlier and earlier each year.