Britt Beemer Projects Christmas Spending to Rise Only 2% in 2007

Furniture World Magazine

The number of consumers that feel worse off financially this Christmas has risen to almost one third of all Americans (31.8%) compared to 18.5% last year, according to a new national survey released today by America’s Research Group (AGR), a fact that has lead to one of the lowest Christmas forecasts in a decade by Britt Beemer, founder and Chairman of ARG. Beemer has accurately forecasted retail sales at Christmas in 15 out of the past 16 years. “This is the softest Christmas retail season that we’ve experienced in many years,” said Beemer. “Many factors such as higher food costs, increased fuel cost and the war in Iraq have remained constant, but this year consumers seem more impacted by them. They looking for bigger bargains than ever and many families plan to stay home and entertain less.” Toys are an important consideration for parents this Christmas, with 16.2% saying they have not purchased toys due to recalls and 21.8% saying they are less likely to buy toys as gifts for Christmas. More parents say they will buy video games (30.3%), doll babies (21.0%) or bicycles (18.0%) instead. Surprisingly, 16.5% of parents have purchased a toy that has been recalled. Of those consumers planning to buy toys this Christmas, 21.5% plan to spend less than last year, while 24.8% plan to spend more. Over two in five families with children (42.0%) say there is no “must have” toy this Christmas. Beemer identified a number of important trends to look for this holiday season: - There will be huge crowds on Black Friday with 46.8% of Americans saying that they expect to shop the day after Thanksgiving compared to only 32.9% last year. This shopping frenzy is driven by the expectation of 52.6% of consumers who expect deals will be better this year. - Fifty-eight percent (58.0%) of consumers say they will be more bargain driven this year with 81.6% expecting retailers to cut prices just before Christmas, up from 76.5% last year. Nearly half (46.5%) will wait for 50% off this season before they buy, up from 39.5% last year, but 50% is not the limit. - The 50% off Christmas sale is a well-established phenomenon in consumers’ minds with 79.0% saying they “believe in 50% off sales.” compared with 77.9% last year. Seventy-eight percent of consumers (78.0%) believe in 60% off sales during Christmas! - Gift cards will continue to reign supreme. Of the 72.5% of consumers who gave gift cards last year, 81.2% will give more this year, while only 12.1% will give fewer. Driving gift cards sales is the fact that well over half of gift card givers (63.6%) say they don’t know what to buy. - Wal-Mart will continue to be king at Christmas with 85.3% of consumers expecting to shop there. A majority (64.4%) also say they are more likely to shop at Wal-Mart for toys due to their new lower prices campaign. - Families expect to stay at home this Christmas with 31.1% planning to travel less and only 21.3% planning to travel more. This Christmas, 32.4% of Americans plan to entertain less, with only 19.7% planning to entertain more, a huge drop from last year when 28.1% said they planned to entertain more. There can be some bright spots for the savvy retailer this year, however, according to Beemer. Consumers say they can be swayed by store advertising, with 40.5% saying advertising “will very much influence them” and 42.1% “will have some influence” this holiday season. Only 36.5% last year said advertising could influence them. As 65.9% of consumers have come to expect poor sales help and 58.4% say they will try to avoid those stores with lower staffing levels, stores that are adequately staffed will have an advantage. The consumer disillusionment is seen by the huge jump from last year when only 46.1% felt stores would be understaffed. Retail staffing of stores selling toys will be a special issue this year as 45.0% of parents want to speak with knowledgeable employees and 42.9% of those will walk out of the store if they cannot get their questions answered. This study consists of 1,000 interviews conducted Thursday through Sunday, November 1 to 4, 2007, at ARG headquarters in Charleston, SC. The error factor is plus or minus 3.8%. This was the first in a series of ARG Christmas surveys. American’s Research Group (ARG) is the consumer–behavior marketing firm that provides clients the insight, strategy and tactics to increase market share. ARG’s expertise in consumer behavior has made it a key resource and advisor to leading brands and top retailers in the nations for 27 years.