The average U.S. consumer will spend $702.03 this holiday season, favoring DVDs over jewelry, discount chains over department stores and low prices over customer service, according to a survey sponsored by the National Retail Federation, an industry trade group.
The poll of 7,800 people predicts that holiday spending will rise 4.5 percent, or about $30, over planned spending in 2003, despite rising fuel prices, and sluggish job and wage growth.
"Consumers still seem to be willing to spend, in spite of what may be some economic challenges," said National Retail Federation President Tracy Mullin.
The survey, and comments from other analysts, offered hope for retailers that 2004 holiday sales will increase as they did last year. Christmas sales lagged in 2000, 2001 and 2002 as the economy drifted through a brief recession and retailers struggled through what for many is a make-or-break season.
Results from the federation's survey echo other forecasts of 3 to 4 percent growth over 2003, driven largely by spending at upscale retailers such as Nordstrom and Neiman Marcus, which have reported strong sales throughout the year.
But not everyone is so sanguine. Howard Davidowitz, chairman of Davidowitz & Associates Inc., a national retail consulting firm, said escalating home heating costs, high consumer debt and other factors "don't add up to a great Christmas."
The National Retail Federation survey found few big surprises, analysts and retailers said, but it offers a snapshot of consumer intentions at the kickoff of the holiday shopping season. The poll, of adults over 18, was conducted by Worthington, Ohio-based BIGresearch in October and has a margin of error of plus or minus 1 percentage point.
Those polled said they expect to spend most of their $702 holiday budget -- or about $407 -- on family members. After that, consumers will spend $71 for friends, $41 on those such as babysitters, teachers and clergy, and $22 on co-workers.
Holiday shoppers will not forget themselves. The poll found consumers will spend an average of $89 on "self-gifting."
Lured by bargains, consumers are still flocking to discount stores, such as Wal-Mart and Target. Seventy-seven percent of the poll's respondents said they will buy gifts at the discount retailers, compared with 53 percent for department stores and 39 percent for specialty stores, such as Gap, Best Buy and Toys R Us.
Relying on discounters is Vanessa Carroll's plan. The District resident, who works for the Social Security Administration, has four children. To satisfy everyone on her shopping list she is skipping department stores and heading for Wal-Mart.
"It's the same stuff, only cheaper" said Carroll, 36.
The survey estimated 38 percent of shoppers will make online purchases in the next two months, up 2 percentage points from a year ago. That surpassed the 21 percent of shoppers who said they will make holiday purchases from a catalogue.
Ellen Tolley, a spokeswoman for the National Retail Federation, said the survey results may be inexact because, a month before the traditional Thanksgiving start of the shopping season, consumers probably have not yet decided what gifts they will give. Questions about specific buying plans will be posed in another poll conducted in November.
To determine likely shopping patterns, this poll instead focused on what consumers want to receive for the holidays.
Books, CDs, DVDs, videos and video games are expected to be this year's most popular products, with the poll finding that 53 percent of respondents would like to receive them as gifts. Slightly fewer, 51 percent, want clothing and accessories, 33 percent want electronics and 22 percent want jewelry.
More than half of consumers said they wanted a gift card, up nearly 2 percentage points from last year's Retail Federation survey. "There used to be a stigma attached to these cards -- that the giver did not care" about the recipient, Mullin said. "That stigma is gone."
The popularity of CDs, DVDs and video games have buoyed executives at Best Buy Co., the nation's biggest electronics retailer. The company is pushing a raft of home entertainment products for the holidays, such as digital cameras and DVD players, saying they are now easier to use and more affordable.
"This technology is on a huge upswing," said Michael Linton, Best Buy's chief marketing officer.
Michael P. Niemira, chief economist at the International Council of Shopping Centers, said he expects high-end shoppers -- whose spending is less influenced by higher gas prices and low wage growth -- to drive growth this year. "That is where all the action is right now," he said.
The National Retail Federation survey found consumers remain price-sensitive. When deciding where to shop, 41 percent said they base the decision on product prices, 20 percent on merchandise selection and just 4 percent on customer service.
The biggest segment of shoppers (34 percent) will begin their holiday purchasing around the same time they did last year, in November. Twenty-three percent will wait until December, the poll found, while 18 percent started before September.
The survey reinforces the image of the last-minute male shopper. Asked when they begin holiday shopping, 22 percent of the women said they start before September, compared with 14 percent of men. Thirty-one percent of men wait until December, compared with just 15 percent of woman, the poll found.
Of course, it's not just men who wait. Janice Mitchell, who lives in Newport News, Va., and has about 27 people on her shopping list, said she always waits until early December before she hits the mall. "I am a Dec. 10 kind of girl," she said.