NEW YORK (Reuters) - Bruised U.S. retailers might find some solace in Deloitte’s most recent survey that showed American consumers were more optimistic about the economy as the holiday shopping season kicks off.
The annual holiday survey released on Wednesday showed fears about the recession slowly subsiding, with about 54 percent of the participants expecting the economy to improve in 2010. This compared with just 28 percent responding favorably last year.
The optimism is also trickling into Americans’ shopping plans for the holiday.
More than half of consumers — about 51 percent of those surveyed — hope to spend more or the same on the holidays, an improvement from last-year’s 41 percent, Deloitte said.
Also, Deloitte survey showed consumers’ total anticipated holiday spending at $1,145, a 16 percent increase over last year.
However, consumers will spend less on gifts and more on nongift items this time around.
“What’s driving that is clearly a focus on being with family and friends ... There’s also this need to replenish. Consumers have been holding back for the last 12 months,” Stacy Janiak, U.S. retail leader for Deloitte LLP told Reuters.
Consumers plan to spend about $452 on gifts this year, down from $532 in 2008 and $569 in 2007, the survey said.
The nongift categories include socializing away from home, entertaining, nongift clothing and home/holiday furnishings, Deloitte said.
The American consumer will however continue to remain focused on the price-value equation and hunt for bargains.
Two-thirds of those surveyed said they planned to shop differently due to concerns about the economy. While 74 percent of these shoppers said they planned to buy items on sale, a good 57 percent said they will look for lower-priced items.
This is certainly good news for discount chains like Wal-Mart Stores Inc as well as off-price retailers.
Discount stores continued to hold the top spot as a shopping destination with nearly six out of 10 people saying they expected to shop at discount/value department stores, the survey said — spelling more trouble for the already distressed traditional department store family.
Only 23 percent of the consumers plan to shop at traditional department stores, a sharp drop from last year’s 35 percent.
“For all the players outside of discount, it’s going to be a matter of demonstrating value and even creating some demand for products that the consumer has been going without for the last 12 months,” Janiak said.
So what kind of gifts will shoppers choose this season?
The survey showed gift cards as the top gift choice — for the sixth year in a row — with 64 percent of consumers planning to buy them as presents.
“I know it’s not an exciting gift. But clearly, the convenience factor, the ease of purchasing them in so many different venues and getting them to the recipients very easily keeps that at the top of the list,” Janiak said.
Also, consumers plan to allocate more money per card this time around — about $35, up from $28 last year and nearly back to the pre-recession average of $36 in 2007, Deloitte said.
Janiak also expects consumers to spend more on apparel this holiday as “people have been shopping their closet all year long.”
Deloitte also saw a significant spike in the number of people who plan to buy technology-related gifts like game consoles, computer and video games, home, personal and automotive electronics.
So will bargain-hunting U.S. consumers wait as long as they did last holiday season to open their wallets? Maybe not.
As retailers have managed inventory tightly throughout the year, they “really have a leg up on the consumer this holiday season,” Janiak said.
“If a consumer is intending on waiting, there’s some concern whether the product will be there when they ultimately go to the store.”
Reporting by Dhanya Skariachan