Holiday Retail Outlook

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NPD`s Eighth Annual Survey Looks Back-to-the-Future
PORT WASHINGTON, N.Y.--(Business Wire)--
The NPD Group, Inc., a leading market research company, released the results of
its annual survey of consumers` holiday spending intentions. Thirty percent of
consumers surveyed told NPD they `plan to spend less` this holiday, which is a
four point increase over last year`s results.

U.S. Consumers` Spending Intentions
2009 vs. 2008

2009 2008
Plan to Spend More 11% 11%
Plan to Spend About The Same 59% 63%
Plan to Spend Less 30% 26%
Source: The NPD Group, Inc./Annual Holiday Survey

"That 4 percent increase is certainly a sign of the times. On the other hand,
that 4 percent is not as dramatic as it could have been." said Marshal Cohen,
chief industry analyst, The NPD Group, Inc. "I think consumers will be looking
for the right gift, rather than the most extravagant or expensive one. That
combined with the soft numbers we are up against from holiday last year, and I
think we will see growth, albeit a modest 0.5 to 1.5 percent."

It is the 0.5 to 1.5 percent growth that takes us `back to the future` and to
holidays past when growth rates of 5 percent or more were unheard of and
unexpected. For Holiday 2009, not only will actual spending levels go `back to
the future` but the kinds of gifts being bought will `go back` to more
traditional holiday gift items. "The survey results point to a return of more
gifts being made of sweaters, fragrances, music, books, movies, and wallets,
again," said Cohen, "We are also seeing make-up and TV`s showing signs of
growth. Other standouts are notebooks/netbooks. They have been growing and will
continue to grow through the holiday."

Top 10 Items Consumers Plan to Buy as a Gift
2009 vs. 2008

2009 2008
1 Apparel 49% 49%
2 Toys 34% 37%
3 Movies 29% 29%
(DVD, Blu-Ray)
4 Books 28% 27%
Electronics
(TVs, Home Theater Systems/DVD Players/Recorders,
Home Audio Products, Satellite Radio, GPS Systems,
Cell Phones, Desktop/Laptop Computers, Computer
5 Peripherals, Digital & Video Cameras, MP3 Players) 24% 23%
6 Accessories 22% 20%
(Bags, Small Personal Accessories, Watches)
7 Music 21% 20%
8 Video Games 20% 22%
9 Fragrances 19% 17%
10 Food 18% 17%
Source: The NPD Group, Inc./Annual Holiday Survey

While there is no change in the top five categories, there is some movement in
the bottom five categories. The survey results show some upward movement in
consumer purchasing intentions for accessories, music, and fragrances. The
number of consumers saying they will purchase those as gifts for holiday has
shifted. Accessories moved up one spot from seventh to sixth this year, music
was up one spot from eighth to seventh and fragrances moved up one spot to ninth
this year.

For the electronics categories overall, the NPD Holiday Survey shows a 20% rise
in the 18 to 24 year old demographic saying electronics are the `gift to
purchase.` "This age group is clearly demonstrating that they feel electronics
are no longer a luxury but are in fact a necessity," said Cohen.

Apparel is also a bright spot. Last year 49 percent of consumers told NPD they
intended to buy apparel as a gift; this year that number is holding at 49
percent. "That is good news for apparel," Cohen said, "Its multi-year slip has
stabilized this year."

What will motivate consumers to purchase this holiday? The survey results point
to `value` as a primary motivator this year. Sixty-two percent of survey
respondents stated value plays a big role in determining what and where they
buy.

This is followed by `special sale` at 61 percent and convenient location with 50
percent.

However, Cohen says this holiday holds a number of variables that could
contribute to the outcome of the 2009 holiday retail season. Or as he calls it:
the `X-mas X-Factor.`

`X-factor for Timing`

When will consumers begin their shopping? This year there was a 3 percent change
in the number of consumers saying they will begin their holiday shopping during
the Thanksgiving weekend or later. The number of consumers that said they would
begin their shopping in early December or at the last minute posted an eight
percent change. "The X-factor here points to a later start for this season`s
shopping," said Cohen.

`X-factor` for the impact of state of the economy on consumer spending.

Almost 50 percent of consumers told NPD that the `state of the economy` will
have a significant effect on their holiday spending. "Will the economy force the
consumer to dip into savings or just cut down those on the list? Perhaps if you
are an in-law, you might just find yourself getting a card rather than the gift
this year," says Cohen.

"Perhaps the biggest X-mas X-factor is the overall state of U.S. consumers`
psyche. Will they be feeling frugal or will they have a case of frugal fatigue
and unleash some pent-up demand?" said Cohen.

Source:The NPD Holiday Survey of Consumer Purchase Intentions was fielded
September 8th to September 15th, 2009.The findings presented here are based on
information from 1,995 completed interviews of NPD's online consumer panel.

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and
retail information for a wide range of industries. Today, more than 1,700
manufacturers, retailers, and service companies rely on NPD to help them drive
critical business decisions at the global, national, and local market levels.
NPD helps our clients to identify new business opportunities and guide product
development, marketing, sales, merchandising, and other functions. Information
is available for the following industry sectors: automotive, beauty, commercial
technology, consumer technology, entertainment, fashion, food and beverage,
foodservice, home, office supplies, software, sports, toys, and wireless. For
more information, contact us, visit http://www.npd.com/, or follow us Twitter at
https://twitter.com/npdgroup.

The NPD Group, Inc.
Beth Boyle, 516-625-4603
beth.boyle@npd.com

Copyright Business Wire 2009