WASHINGTON – Retailers can expect a red Christmas if consumers make good on their plans to sharply reduce their holiday spending as reported in the ninth annual holiday spending survey conducted by the Consumer Federation of American and CUNA.
While the trend of consumers reporting plans to cut holiday spending has been going on for some time, results from this year’s survey indicate even more consumers intend to cut back this year. Each year from 2003 to 2007, between 30% and 35% of consumers reported that they were planning to cut back their holiday spending. This year that skyrocketed to 55% reporting they were planning to reduce this spending as least “somewhat”, with 27 percent of all respondents indicating that they planned to spend "much less than last year."
"Consumers are expressing an unusually strong desire to tighten their belts this holiday spending season,” said CUNA Chief Economist Bill Hampel. “More say they plan to cut back their spending this year than at any time in the nine years we have been doing this survey. As a result, we may see an actual decline in holiday spending for the first time in many years."
Record numbers of all age and income groups said they are planning to reduce holiday expenditures, but women and families with children were much more likely than men and households without children, respectively, to indicate they were planning cutbacks. Sixty-two percent of women report they plan to cut back, but only 48% of men said the same. Similarly, 61% percent of households with children, but only 51% of households without them, indicated they were planning to reduce spending.
Driving the trend: concerns about the economy. “The financial crisis and sustained economic downturn the nation has been experiencing are taking their toll on consumers,” Hampel explained. “People are worried about their finances, job loss, and what the future will hold. Amid such uncertainty, they are reacting by reining in their spending plans."
