The Latest Holiday Forecasts

Nov 14, 2006 3:36 AM  By

In the weeks leading up to Thanksgiving and Black Friday, reporters and editors are flooded with news releases about “exclusive” surveys that aim to predict just how jolly the Christmas season will be for retailers.

So what are this year’s pundits predicting?

Visa USA is predicting that this year’s holiday retail sales (excluding auto sales) will be 7.5% higher than last year’s. That’s slightly lower than the year-over-year growth of the previous two holiday seasons.

“It’s a mixed bag of indicators this year—lower energy prices, continued positive employment trends, and a real estate slowdown,” Wayne Best, senior vice president of business and economic analysis, said in a release. He predicted that high-definition TVs and other big-ticket home entertainment products would be popular items.

But Clear Thinking Group expects holiday sales to increase just 4.5% over last year’s. Last year’s holiday retail sales were up more than 6% than those for 2004. The retailing and consumer products consultancy blames higher oil prices and interest rates on credit-card debt as contributing to the modest gain.

Clear Thinking also expects consumers to buy fewer big-ticket items. “We see Christmas stockings being full, but with smaller, less pricey gifts and more of those than in the past,” partner/managing director Lee Diercks said in a release. He cited the lack of any “must haves” items as a key reason.

The Consumer Electronic Association (CEA), meanwhile, expects consumers to buyer fewer electronics items as gifts but to spend more on each purchase. The trade group expects holiday sales of consumer electronics to reach $22 billion, or $185 a household, up 27% from last year.

The National Retail Federation (NRF) earlier weighed in with its prediction of a 5% increase in retail holiday sales, with consumers spending an average of $791.10 on gifts, cards, decorations, and food. But two weeks ago it released another report indicating that shoppers “will use the Internet for an average of one-fourth (28.9%) of their shopping.”

That doesn’t mean 29% of purchases will be made online, however. “While many shoppers plan to purchase holiday gifts online this year, others are using the Internet to look for gift ideas, research products, and compare prices before heading to the store,” Scott Silverman, executive director of Shop.org, the online retail division of NRF, explained in the release. Forty-seven percent of the 7,623 consumers surveyed did plan to make at least one online purchase, however.

And those online shoppers will be buying till the last minute. In a survey of 1,52 subscribers to “Home Electronics Journal” e-newsletter, 31% of those who plan to shop online expect to be making holiday purchases the week of Dec. 18, compared with 26% of the retail shoppers. And during the week between Christmas and New Year’s, 18% of the online shoppers expect to still be buying gifts.

The majority of those last-minute shoppers will no doubt be men. Of 1,905 online shoppers surveyed by BizRate Research for shopping engine Shopzilla, 15% of the men said they’d still be shopping the week of Dec. 18, compared with 5% of the women. And while 48% of the men surveyed were not looking forward to holiday shopping, 56% of women were.

But men and women were equally likely to shop online, according to the study: 87% of the men and 87% of the women said they planned to buy at least some gifts online. Thirty-five percent of respondents said they’ll do the majority of it online, in fact—though bear in mind that this was a survey of online shoppers. Their top reasons for shopping online for the holidays: the ability to shop any time of day (cited by 83%), to save time (83%), to avoid crowds (72%), and to save money (56%).

In addition to wanting to save time, shoppers want to help save the world. Of the 1,022 adults surveyed by branding agency Cone, 57% said they plan to buy a product in which a percentage of the price was donated to a cause. That’s up just two percentage points from 55% of last year’s respondents. Fifty-nine percent said they planned to buy from a retailer that supports a cause, up from 52% last year.