Christmas Spending Forecast in November Up from Last Year

As of November, each American consumers expects to spend $76 more this Christmas than they expected to spend last year, according to a recent Gallup poll.

In November, Americans surveyed answered $714 to the question, “Roughly how much money do you think you personally will spend on Christmas gifts this year?” In November 2009, the answer was $638, while in November 2008, the answer was $616. Back in November 2007, the answer was $866.

According to Gallup, in October consumers forecast that they would spend $715 on Christmas gifts this year.

If the figure holds steady through December, it would mark a 2 percent year-over-year increase in holiday sales. “Further, if consumers’ spending estimate increases between November and December, as it typically does, actual retail sales could improve by closer to 4%, similar to the long-term average,” Lydia Saad of Gallup writes.

Last year, consumers forecast $740 in Christmas gift spending in October, $638 in November and $743 in December.

The poll also found that 52 percent of American consumers expect to spend about the same amount as they spent last Christmas. However, 34 percent said they expect to spend less than they did in 2009, while 12 percent said they expect to spend more than they did last Christmas.

The 22-percentage-point gap is nearly double the average 13-point gap observed during the past 20 years, according to Gallup. This serves as “a note of caution to Americans’ dollar spending forecast,” Saad writes.

The bottom line is that consumers appear to be set to boost their Christmas spending this year from last year.

One other expectation retailers should have is more infrequent use of credit cards for holiday purchases this year, according to the National Retail Federation (NRF), which recently found that 43 percent of holiday shoppers will rely on debit cards as their primary form of payment. This reflects a 20 percent increase from the 34.3 percent mark observed in 2005.

Meanwhile, 27.6 percent of shoppers will use their credit cards for their holiday gift purchase, the lowest response since the 26.8 percent observed in 2002. The NRF also found that 25.7 percent of shoppers plan on using cash, up from 24.9 percent in 2009.

“A variety of promotions ranging from free shipping to one-day sales will make it easier for shoppers to afford the perfect gift for their loved ones this holiday season,” said Matthew Shay, NRF president and CEO.

The NRF notes that 10.5 percent of consumers say they have already finished at least half of their holiday shopping, seemingly due in part to early Black Friday sales and holiday specials.

Sources:</strong

http://www.gallup.com/poll/144506/November-Christmas-Spending-Estimate-Outpaces-2009.aspx

http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1030