Santa is being a little more generous this year.
Americans celebrating Christmas will fork over $795.86 each, up 5 percent from last year, according to BIGresearch, a Worthington, Ohio-based consumer research firm. And while growth is somewhat slower than it has been in years past — in 2005, the firm forecast an 8.1 percent increase — total spending will be a record $154 billion.
So why the increase? “Because we don't have $3 gasoline,” says Phil Rist, vice president of strategy at BIGresearch. “And because we don't have the fear that we had last year about winter heating bills going through the roof.”
Soaring corporate profits, big Wall Street bonuses and a record-high stock market are among the other factors contributing to increased yuletide spending this holiday season.
But shoppers can't afford to be frivolous right now either, says Rist. “(Consumer) debt level is still high, and the housing market is declining,” he says. “We're going to see proactive consumers searching out the best deals this year. Even though people want to be fun and festive during the holidays, there is still a real world that they live in.”
Whether shoppers are spending time sifting through deals or simply delaying buying, they seem to be in no rush. According to Deloitte & Touche's holiday survey, 24 percent of shoppers will wait until the last minute to make their holiday purchases this year. And it's more men than women when it comes to last-minute shopping: 18 percent of men will wait until early December to make their holiday purchases, while 10 percent will wait until late December.
“As a result, the department store is the shopping location of choice for (men) because (they) can go in there and within a couple of hours, hit lots of different types of things and cover a lot of people on (their) list,” says Bruce Westbrook, Deloitte's Atlanta-based managing director.
If BIGresearch predictions ring true, 65 percent of shoppers will do at least some of their holiday shopping at department stores this Christmas. And while discount stores remain the most popular place to purchase holiday items — 74 percent of shoppers will make Christmas purchases at discount stores — online venues continue to grow in popularity. Online heavyweights Amazon and eBay will profit from the 50 percent of holiday shoppers who will place orders online this Christmas.
Also growing in popularity — and acceptance — are gift cards. According to the National Retail Federation, gift card sales will total $24.8 billion this holiday season, up $6 billion from 2005.
“If you gave someone a gift card when I was young, you were considered less thoughtful because you didn't put time into the gift,” says Westbrook. “Now, people welcome the gift cards, because it is a chance for them to get something that they wanted most. (Recipients) don't have to have their needs or desires intuited by someone else.”
But even with the increased options, Deloitte says 24 percent of celebrators still don't think they'll get what they want come Christmas.