By Monica Chen
mchen@heraldsun.com; 419-6636
DURHAM -- For the first time since the National Retail Federation began surveying consumer habits for the holiday season in 2002, the average amount shoppers plan to spend will drop this year from a year ago.
According to the association's Holiday Consumer Intentions and Actions Survey released this week, American consumers plan to spend an average of $682.74 on holiday-related shopping, a 3.2 percent drop from last year's $705.1.
By contrast, although consumers had already started cutting back last year, holiday spending was still expected to increase by 1.9 percent in 2008.
The recession will have lasted 24 months by this December, and the economy is still a huge concern for consumers.
"We still won't see consumer splurging. Many are still holding on to their wallets pretty tightly this Christmas," Kathy Grannis, a spokeswoman for NRF, said Wednesday.
The national unemployment rate for September was 9.8 percent. In North Carolina, the unemployment rate was 10.8 percent in September. The state has had one of the highest unemployment rates in the country throughout 2009.
Meanwhile, U.S. personal income actually grew by 0.2 percent in the second quarter of 2009, the first time it has grown nationally in a year, according to the U.S. Bureau of Economic Analysis. In the first quarter, personal income fell 2.3 percent.
In North Carolina, personal income grew 0.4 percent from the first quarter of 2009.
The small increase in personal income isn't likely to add to consumer spending, according to Grannis.
"There's still too many people without jobs," Grannis said. "People are still very hesitant to spend their money."
"Basically, price will be the deciding factor for consumers this year," she added.
According to NRF's survey, more than half of shoppers say that sales and price discounts (43.3 percent) or everyday low prices (12.7 percent) will be the most important factor when deciding where to shop.
Candy and food are the only bright spots in retail. The average shopper is planning to spend $10 more in that category than last year ($90.26 in 2009 vs. $80.28 in 2008).
The majority of holiday shoppers, or 70.1 percent will buy from discounters this year, though more than half, 55.8 percent, will still shop at department stores. Grocery stores (45 percent), the Internet (42.4 percent) and other retailers will remain popular.
In response, retailers are cutting back on inventory in preparation for soft sales.
"Once the most popular items are gone, retailers won't have anywhere to get them," said NRF President and CEO Tracy Mullin, "so if there was ever a holiday season to buy early, this is it."
