NEW YORK (Reuters) - Most U.S. consumers plan to spend less on holiday gifts this year as they worry about job security and higher prices for necessities, according to a Deloitte survey released on Wednesday.
“Consumers are much more pessimistic about the economy,” with nearly 60 percent saying they’ll spend less this holiday season,” said Deloitte retail analyst Stacy Janiak.
Home improvement stores such as Home Depot and Lowe’s are most vulnerable, as consumers watching home values plummet stop investing in their property, Janiak said.
“The home being somewhat of a minus on the balance sheet of the consumer, people certainly don’t have the appetite to put more money into it,” Janiak told Reuters.
For months, U.S. consumers have trimmed spending due to a housing slump, credit crunch and rising food and fuel prices. Their confidence dwindled much further in the last month, as a financial markets crisis threatens a global recession.
Around 53 percent of people surveyed by Deloitte expect the economy to weaken next year, compared with 43 percent of people who expressed that view last year. The 2008 survey reflected the highest level of pessimism in more than 10 years.
Almost six in 10 consumers said they would reduce spending this holiday season. Shoppers plan to spend about $532 on gifts, down 6.5 percent from last year, and buy fewer items.
Nearly seven in 10 consumers said they would wait for store sales, cut back on shopping trips to save gasoline and use more store coupons.
Around 65 percent of consumers said they would seek out discount department stores, a trend that has helped the likes of Wal-Mart Stores Inc at the expense of chains like Macy’s or J.C. Penney. Some 35 percent of shoppers said they would prefer either traditional department stores or the Internet for holiday shopping.
Two-thirds of consumers surveyed planned to give gift cards, slightly below last year’s 69 percent. People expected to buy an average 5.3 cards this year, less than last year’s 5.5 cards, and to spend an average $28.43 per card, compared with $36.18 last year.
This is the fifth straight year gift cards are expected to be the top gift choice.
“They’re convenient, and you don’t have to worry about size, color, or something needing to be returned. All of that still holds true,” Janiak said.
Nearly half of consumers had at least one unused gift card and on average had 5.9 unused cards, up from 3.7 last year.
The poll of 13,276 consumers, conducted between September 26 and October 7, has a margin of error of plus or minus one percentage point.
Editing by Matthew Lewis