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America’s Research Group/UBS 2008 Christmas Survey

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The number of consumers saying they will spend less for Christmas gifts is at an all time high this year at 40.1% – nearly double last year (23.0%) and approaching triple ‘those spending less’ in the previous three years, according to results of the fourth America’s Research Group/UBS Christmas 2008 Survey released today. Of those spending less, job fears motivate 63.6% this year versus 0% last year. The big concerns last year were high gas prices at 35.7% and high heating oil bills at 26.2%. “With recessionary cutbacks top of mind, American consumers are flocking to Wal-Mart for discounts and their wide range of merchandise,” said C. Britt Beemer, CEO and Founder of America’s Research Group (ARG) who lowered his Christmas retail sales forecast to minus 3.5% last week. Beemer has correctly predicted Christmas retail sales in 16 of the last 17 years. So far this Christmas season, Wal-Mart shopping is at an all time high with 69.1% of consumers saying they have been to the store. Of those consumers who shopped this past weekend, most chose Wal-Mart by a large margin: • Wal-Mart 49.5% (32.3% in 2007) • Sears 23.3% (19.0% in 2007) • Target 19.8% (18.8% in 2007) • JCPenney 13.0% (18.1% in 2007) • Best Buy 12.6% (16.5% in 2007) Although the number of shoppers out this past weekend (49.8%) equaled the number last year (49.4%), they went to fewer stores. Over forty percent went to only two stores this year (41.6%) compared to 32.8% last year. Over fifty percent (54.5%) shopped at five stores or less this year, compared to 47.7% last year. More consumers are also returning to the same stores this year (44.8% compared to only 33.6% in 2007 and 33.8% in 2006). Store traffic could get lighter over the next two weekends as 20.0% of consumers say they have finished all their Christmas shopping. Of those consumers who say they will wait until December 24 to finish shopping, 95.7% are looking for better/bigger bargains -- an all time high. Internet shopping rose only slightly the Monday after Black Friday with 24.2% purchasing on-line compared to 22.5% last year. Only 15.0% of workers said their employers allowed them to go on-line at work compared to 17.6% last year. “This is hardly the basis to call this ‘Cyber Monday’,” Beemer said. In addition, few consumers bothered to go on-line to find a lower price after shopping stores -- 16.7% this year, compared to 19.7% last year. More shoppers are not buying a gift card this Christmas (44.3%), a high percentage when compared to previous years (26.0% in 2007, 27.1% in 2006, 41.8% in 2005 and 37.0% in 2004). Toy shopping is also down this year with 48.4% of consumers buying them compared to 54.7% last year. The number of shoppers buying something nice for themselves is at an all-time low at 30.7% compared to 55% ten years ago and 33.8% last year. Top purchases at Wal-Mart so far this season are: • Toys 39.0% (37.1% in 2007) • Video Games 29.8% (20.1% in 2007) • Electronics 28.8% (31.9% in 2007) • Children’s clothes 21.6% (11.3% in 2007) The America’s Research Group/UBS 2008 Christmas Survey consisted of 1,000 telephone interviews conducted Saturday and Sunday, December 6 and 7, 2008 at ARG headquarters in Charleston, SC. The error factor is plus or minus 3.8%. UBS has teamed with ARG for six surveys this Christmas season. The fifth survey is scheduled next weekend. America’s Research Group is one of the nation’s foremost consumer research and strategic marketing firms. CEO Britt Beemer is a key resource and advisor to leading brands and top retailers. He is author of The Customer Rules, a new book published by McGraw-Hill. UBS Global Equity Research provides the broad global perspective and in-depth analysis that institutional investors need to make good investment decisions. With more than 600 analysts, associates, strategists and economists in EMEA, APAC and the Americas, UBS covers approximately 85% of the world market capitalization - over 3,300 companies worldwide across 46 different markets. In addition to UBS's disciplined fundamental research, clients also rely on UBS for corporate and expert access to give them the insight they need, when they need it.

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