Shoppers to constrain holiday spending: survey

By Nicole Maestri

NEW YORK (Reuters) - U.S. shoppers will spend more on holiday-related purchases this year, but that spending will increase by the lowest level in at least six years, according to a survey released by an industry trade group on Thursday.

U.S. consumers plan to spend an average of $832.36 on holiday shopping this year, up just 1.9 percent compared with a year earlier, according to the National Retail Federation's 2008 holiday survey. That would be the smallest rise since 2002, when the NRF began conducting the survey.

The survey comes as the trade group has already forecast 2008 U.S. holiday sales, or retail industry sales in the months of November and December, to increase 2.2 percent -- which would also be the lowest level of growth in six years.

"Consumers will be sticking to their budgets and looking for good deals when deciding where to spend this holiday season," NRF President and Chief Executive Officer Tracy Mullin said in a statement.

Last week, many U.S. retail chains, including Target Corp, Saks Inc, Abercrombie & Fitch Co, posted September monthly sales that missed Wall Street's expectations.

Consumers clamped down on spending as the worst financial crisis since the Great Depression hit the United States in mid-September, and government data released on Wednesday showed that September sales at U.S. retailers posted their biggest monthly decline in more than three years.

As shoppers look to stretch limited budgets this holiday, 40 percent of shoppers said sales or price discounts would be the largest factor in determining where they will shop. Almost 70 percent of consumers plan to do some shopping at discount stores, while 58 percent plan to shop at department stores.

For the first time in the survey's history, the NRF said people plan to spend less on gifts for family members -- $466.13 this year, down from $469.14 last year. But spending will increase on gifts for friends and co-workers, it found.

The trade group said spending is expected to be particularly weak among 18- to 24-year-olds, who expect to spend $50 less on gifts than last year.

With retailers offering some of their most enticing discounts of the year during the holiday season, the survey found that shoppers expect to spend $119.83 on additional non-gift purchases for themselves or their families during the holiday season, up from $106.67 last year.

The survey, conducted for NRF by BIGresearch, polled 8,117 consumers September 30 through October 7. The NRF said the poll has a margin of error of plus or minus 1.0 percent.

(Editing by Gary Hill)