As the Commerce Department released its October report, showing U.S. consumer spending grinding to a halt in October as inflation began to erode any gains in income, SNEWS® thought it would be interesting to take a closer look at holiday shopping projections compared to the reality of post Black Friday and Cyber Monday reports.
According to a survey conducted by BIGresearch for the National Retail Federation, up to 132.9 million Americans were predicted to shop Friday, Saturday or Sunday over the Thanksgiving weekend.
While 55.1 million people said they definitely planned to shop during that weekend, 77.8 million said they may shop. Many of this year's post-Thanksgiving shoppers were predicted to be young adults, aged 18-24, as nearly half of them (47.2 percent) said they definitely planned to shop the weekend after Thanksgiving.
Reality exceeded prediction as a total of 147 million shoppers hit stores, up 4.8 percent from the year before. However, consumers only spent an average of $347.44, down 3.5 percent from 2006. Smaller ticket items led the list of hot items and included laptops, digital photo frames and sweaters. Many retailers, nervous about what the holiday season might bring, turned to opening their doors earlier than ever, which paid off in terms of traffic, if not actual big-ticket sales, with 14.3 percent of consumers out shopping before 4 a.m., compared with 12.4 percent in 2006.
ShopperTrak RCT, a service that monitors retail spending and the retail industry, reported that sales on Friday, Nov. 23, and Saturday, Nov. 24, increased 7.2 percent from 2006 to $16.4 billion.
According to the NRF, men once again proved to be the better Black Friday customer. With a greater emphasis on door-buster specials in the consumer electronics category, men outspent women $393.63 to $303.95.
The weekend saw 55.1 percent of shoppers visiting discount stores, up from 49.6 percent in 2006. Consumers also shopped in traditional department stores (38.7 percent), specialty retailers (43.2 percent) and online (31.6 percent).
The most popular items purchased were clothing or clothing accessories (46.8 percent), as well as books, CDs, DVDs, videos or video games (41.7 percent). Other purchases this weekend included consumer electronics (35.7 percent), toys (28.2 percent) and gift cards (21.0 percent).
As of Sunday, Nov. 25, the average person had completed 36.4 percent of their holiday shopping, showing virtually no change from last year. Only one in 12 consumers (8.2 percent) had finished their holiday shopping as of the end of the Black Friday weekend.
It is a term that was coined, according to Shop.org, just two years ago, but Cyber Monday has been clearly embraced as a critically important shopping day this year by all reports. Not surprisingly, a vast majority of shoppers were expected to do their buying from work.
A Shop.org survey conducted by BIGresearch predicted that 72 million people planned to shop on Cyber Monday, up from 61 million in 2006.
Reality far outstripped projections it seems.
ComScore, an Internet research company located in Reston, Va., reported that sales for the day leapt to a mind-boggling $733 million, up 26 percent from 2006. Yahoo reported that its online shopping services were suffering periodic outages during the day due to the overwhelming consumer demand.
What is interesting to note, though, is that online consumers did not wait until Monday it appears. It was reported that online consumers spent $272 million on Thanksgiving Day, and $531 million on Friday, Nov. 23 -- up 22 percent from 2006.
CyberMonday.com, a one-stop shop for consumers looking for Cyber Monday deals, received more than 1.5 million unique visitors on Cyber Monday alone, five times more than one year ago, according to Mall Networks, which powers the site. The site offers promotions and special deals from more than 550 online retailers.
Hope springs eternal…sort of
Amid the somewhat bright news following the Thanksgiving consumer spending reports, there are indicators that the remaining 21 shopping days until Christmas will be bright…at least for most retailers.
Consider that the weather trends are most favorable, with snow finally in the Midwest and East, and cold temperatures across much of the country. Snow and a nip in the air does wonders for putting shoppers in a Christmas-spending state of mind, according to the folks at weather-forecasting service Planalytics.
Weather watching aside, here is what a few surveys project for the remaining days of December:
>> According to the International Council of Shopping Centers, 72 percent of those surveyed indicated that they will spend the same, more or substantially more on gifts and holiday-related items compared with 2006. The average spend will be $1,116 and includes gift buying, holiday travel and entertaining during the season of giving.
>> Comdata reports that gift card spending will increase dramatically this year, not so much because there is more demand, but because more retailers are offering gift card options. Of note, 53 percent of those redeeming gift cards spend more than the amount on the card. It is expected that the average gift card buyer will spend $203 on gift cards this year compared with $186 in 2006.
>> Though it is below the 10-year average increase of sales during the holiday period, and the projection is for the slowest holiday sales expansion since 2002, the National Retail Federation is projecting an increase of 4 percent in holiday spending to $474.5 billion. All things considered, any increase is a good increase indeed.
>> The Clear Thinking Group, a retailing and consumer products and manufacturing consulting firm, projected in early November that holiday retail sales would rise 2 percent to 2.5 percent, compared with 4.6 percent in 2006. Its reasoning is that increases in prices for consumer staples, such as bread, milk, meat and coffee, as well as rising oil prices will have a negative impact on retail spending, even during the holiday season.
>> On the other hand, FTI Consulting, a global business advisory firm, projects holiday sales will rise 3.5 percent, compared with the firm's 4.8 percent forecast against an actual 5 percent increase in sales for 2006.