SymphonyIRI: Budget grinch will restrict most holiday budgets
CHICAGO — As many as 71% of consumers earning less than $100,000 per year are planning to trim back their spending this holiday season, according to new research, “Holiday Shopping 2011,” released Tuesday by SymphonyIRI Group.
In addition, 74% of consumers will be spending less than $800 in total on the holidays, and 73% will begin shopping before Dec. 1. These findings point to a holiday season filled with consumers doing their homework to find the best deals and most value for their money, Susan Viamari, editor of SymphonyIRI's Times & Trends, suggested.
“Consumers are going to shop for gifts that help make the holidays bright, but they are going to do so with an eye toward keeping costs down,” Viamari said. “The Internet is going to play a big role in helping consumers stick to their budgets. In fact, 81% of consumers say they will be shopping online this year. This is a sizable jump from 2010, when 54% of consumers told us that they would do some of their holiday shopping online.”
With 44% of consumers saying they are worse off financially today versus one year ago and 82% saying they think government actions are making a negative impact on the economy, this uncertainty is expected to impact holiday budgets. Findings from SymphonyIRI’s quarterly MarketPulse survey, conducted online in September 2011, revealed that consumers expect ongoing deterioration across a number of budget-related measures in coming year:
70% are concerned about the price of food;
65% are troubled about the cost of utilities;
58% are worried about gas prices;
53% are uneasy about the cost of borrowing/interest rates; and
52% are anxious about the value of investments, including stocks, bonds, 401K, retirement accounts, etc.
These concerns will lead a number of consumers to cut back even further this year. SymphonyIRI’s "Holiday Shopping 2011" survey results found that 26% plan to spend less on holiday gifts, 16% will reduce spending on celebration-related food and beverages and 11% will spend less on holiday beer, wine and spirits.
For 74% of consumers this year, gift-giving budgets will top out at $800, which is in line with what was spent last year. However, budgets will be smaller for 26% of consumers. Cut backs are happening across income brackets, but they are most prevalent among middle-income shoppers.
Almost 1-of-every-3 shoppers will be relying more heavily on pre-made lists, and only 39% of consumers reported they will purchase fewer unplanned gifts this year than they have in the past. With lists in hand, 75% of consumers will begin their shopping before Dec. 1. While this timeline is similar to last year, 1-in-5 consumers are starting earlier in hopes of saving money.
Many consumers are timing their holiday shopping in order to accommodate budgetary needs. For instance, 46% want to spread spending out rather than making fewer, larger trips, 41% want to take advantage of sales and 24% want to ensure availability of items they want to purchase.
To get the most for their money, consumers are turning to the Internet to help with their money-saving strategies. Interesting findings from the survey include:
44% of consumers will use more coupons from retailer websites versus 54%, who will use about the same as last year;
42% of consumers will use more coupons from manufacturer websites versus 54%, who will use about the same as last year;
61% of consumers will use more coupons from group couponing websites versus 33%, who will use the same as last year;
48% of consumers will take advantage more often of promotions learned online versus 50%, who will leverage online promotions with the same frequency as last year; and
43% of consumers will compare products on the Internet more often (e.g., consumer forums and blogs) versus 54%, who will do the same comparison shopping as last year.
SymphonyIRI is offering a free webinar, entitled “Holiday Shopping 2011: What Consumers Can Expect in Their Stockings This Year,” on Thursday, Oct. 20 at noon EST. The webinar will highlight findings from the newly released SymphonyIRI "Holiday Shopping 2011" report and will be hosted by Viamari. To register for the webinar, click here.