A majority of US consumers could be enticed to begin their holiday shopping in the next 30 days by retail discounts, according to the latest results from the American Express Spending and Saving Tracker, a monthly consumer index that measures spending intentions over a number of retail categories.
September’s study results also reveal that young professionals are looking for ways to cut back on their Halloween and Thanksgiving spending, and many will alter their Thanksgiving travel plans, writes Retailer Daily.
Travel and Dining Outlook Promising
American Express reported that expenditures in the travel and dining category appear to be headed in a positive direction:
- 41% of overall respondents plan to spend more on travel in the next 30 days than they did last month.
- 78% of affluent respondents plan to spend the same or more on dining out in the next 30 days than they did last month.
Necessities Take Hit
On the other hand, plans for dining out may be negatively affecting eating-in, though they do not appear to be increasing the need for personal grooming:
- Grocery sales may go down, as 49% of overall respondents expect to spend less on groceries in the next 30 days than they did last month.
- 23% of overall respondents expect to spend less on personal grooming in the next 30 days than they did last month.
Halloween Not a Treat for Young Professionals
More than one-third (36%) of young professionals are purchasing less expensive costumes and decorations for Halloween, compared to 16% of the affluent and 15% of the general population, the study found. At the same time, 26% of young professionals are making their own costume or using hand-me-downs. This compares with 13% of the affluent and 11% of the general population.
Separate research from the National Retail Federation also confirms this expected decline in Halloween spend.
Thanksgiving Plans Altered
Though 30% of all respondents said they would likely alter their Thanksgiving travel plans from last year, only 21% of that subset plan to decrease spending, with 19% of those who traveled last year staying home this year. Additional Thanksgiving intentions:
- Young professionals are most likely to decrease Thanksgiving spending, with 11% intending to drive instead of flying, compared with 7% of the general population and 6% of the affluent.
- 8% of young professionals plan to stay fewer days for the Thanksgiving holiday weekend, compared with 3% of the affluent and general population.
- 7% of young professionals plan to offset travel costs with reward points, compared with 4% of the affluent and 3% of the general population.
Affluent Need Bigger Discounts
Regarding holiday spending, 80% of overall respondents in the study intend to make end-of-year holiday gift purchases, with 22% planning to start in October, 30% planning to start in November and 28% planning to start in December.
Eight in ten (82%) overall respondents could be enticed by a discount to begin holiday shopping in the next 30 days, with 96% of young professionals and 94% of the affluent agreeing, the study found. This is a significant reversal in sentiment from last month, when 69% of all respondents said a department store discount would not motivate them to start holiday shopping early.
However, the likelihood to begin shopping among the different groups still depends upon the discount offered. On average, young professionals could be enticed to start holiday shopping this month with a 10% discount, while the affluent require a heftier average discount of about 30%.
The Spending and Saving Tracker is more optimistic in its outlook for the 2009 holiday shopping season than several recent major research studies. Nielsen, Deloitte and Retail Forward have all predicted essentially flat holiday sales, while the NRF has predicted a 1% sales decline. However, the Spending and Saving Tracker is based on more current data, suggesting consumers’ holiday spending outlook has improved in the past month.
Another private consumer index, the Deloitte Consumer Spending Index, also gives an optimistic view of consumer spending trends. The Deloitte Consumer Spending Index rose 11.6% and reached a two-year high in September 2009, climbing from 3.08% to 3.44%.
However, The Conference Board Consumer Confidence Index decreased from 54.5 in August 2009 to 53.1 in September 2009, driven in large part by the performance of the Present Situation Index, which measures consumer assessment of current economic conditions. Other results from that index suggest consumers are less pessimistic about the future than they are about the present.
Recent data released by the federal government paints a less rosy consumer spending picture. According to the Bureau of Economic Analysis, US consumers showed little change in their personal spending or earning habits, although personal saving dropped 34.5%, indicating increased willingness to spend.
About the research: The American Express Spending & Saving Tracker research was completed online among a random sample of US consumers ages 18+. The research sample of 2,009 surveyed the general population, as well as two sub-groups - the affluent and young professionals. Interviewing was conducted by Echo Research from September 24-29, 2009. Affluent respondents are defined as having a minimum annual household income of $100K. Young professional respondents are defined as younger than age 30, having a college degree, and a minimum annual household income of $50K.