Still, fewer now than last year say they will be spending less than a year ago
PRINCETON, NJ -- Americans' estimate of the total amount they will spend on Christmas gifts this year has fallen precipitously over the past month, sending the figure back to last year's record lows. Americans' average Christmas spending prediction is now $638. This nearly matches the $616 recorded in November 2008, amid one of the worst holiday retail seasons in recent memory.
"Americans' current spending prediction is roughly the same as it was last year at this time, and, indeed, the majority (57%) now say they will spend the same amount on gifts as they did last Christmas."
The latest result is Gallup's second holiday spending forecast for 2009, based on a Nov. 5-8 national survey. Last month, Americans predicted they would spend $740 on gifts, a figure that offered more hope for holiday retailers.
Americans' current spending prediction is roughly the same as it was last year at this time (and is nearly identical to the $639 recorded in December 2008), and, indeed, the majority (57%) now say they will spend the same amount on gifts as they did last Christmas. Further indicating that last year's stunning 3.4% drop in holiday retail spending is not likely to be repeated, fewer Americans explicitly say they will be spending less on gifts this year -- now 34%, down from 46% in 2008.
Still, the 34% who today say they will spend less is higher than at any other time in the recent past, prior to 2008. Also, as in 2008, few Americans today (now 8%) say they will be spending more than they did a year ago.
Today's measure of Americans' Christmas spending intentions is very similar to the November and December 2008 readings. However, there are some slight differences this year in the demographic patterns.
Most notably, young adults (those 18 to 34 years of age) are planning to spend more on gifts this year than they were in either of the final 2008 pre-Christmas polls. Middle-aged adults are planning to spend less, while -- going by the midpoint of last year's readings -- older adults (those 55 and older) are planning to spend about the same amount.
Intended spending appears to be holding up at last year's levels in the East, Midwest, and South, but is lower in the West. The data suggest that parents of minor children may be paring back a bit, while those without children may spend more.
Interpreting Spending Forecasts
Gallup's Christmas spending forecasts can be especially helpful in gauging whether the holiday retail season will be a boom or a bust, but small year-to-year changes -- as represented by the current result -- can be difficult to interpret.
Prior to 2008, Gallup found that in years when Americans' anticipated Christmas gift-spending figure equaled or exceeded that of the previous year (as in 2003 and 2004), retail sales showed fairly robust annual increases, in the 5% to 6% range. In years when Americans' anticipated gift outlays fell well below the previous year's estimate (as in 2000, 2001, and 2002), year-to-year growth in holiday season retail sales was relatively anemic, generally falling below 5%.
Last year's dip into the low $600 range, after spending predictions registered $866 in November 2007, offered a clear signal that Americans were reining in their spending to a perhaps unprecedented degree. That was borne out in actual retail sales data. According to historical patterns, the fact that Gallup's November 2009 spending projection is very similar to (and not lower than) those recorded in November and December 2008 should mean spending this year will not be as deflated as last year. Whether that means holiday spending will be flat or actually improve compared with 2008, or only decline by a smaller percentage, is unclear. However, it is unlikely to decline by as much as occurred in 2008.
Americans, on average, currently plan to spend $638 on Christmas gifts this year, very close to the figure they reported last November. Also, the majority of Americans now say they will spend "the same amount" on gifts as they did the prior Christmas, marking a return to the pre-2008 consumer mentality. Although the still-inflated percentage saying they will "spend less" suggests retailers are not yet out of the woods, when considered with the other findings, it appears the 2009 holiday retail season will not be as depressed as last year's.
Same-store sales reports released earlier this month offered some encouraging signs about a possible uptick in spending in September and October; however, given the fragility in the economy and consumer psychology, there is no guarantee these trends will hold through December. Thus, even the flat holiday sales suggested by Gallup's latest Christmas spending intentions data may be a welcome relief to retailers at the end of a year when monthly department store-type spending through August fell roughly 4% behind 2008 levels. Gallup will publish its final Christmas spending forecast in early December.
Results are based on telephone interviews with 1,008 national adults, aged 18 and older, conducted Nov. 5-8, 2009. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±4 percentage points.
Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.