Christmas Spending Intentions Similar to Last Year

by Joseph Carroll, Lydia Saad, and Steve Hanway

Americans plan to spend an average of $730 on Christmas gifts

GALLUP NEWS SERVICE

PRINCETON, NJ -- With the holiday season accounting for roughly a quarter of annual retail sales in the United States, there is a tremendous amount riding on the spending pattern of consumers over the next seven weeks. Many of the factors determining whether this will be a banner year or a bust are already falling into place, including consumers' spending intentions. Gallup's annual indicator of how much Americans plan to spend on Christmas gifts suggests that this year's holiday sales will likely be similar to 2003, which is to say not great, but not bad.

Spending Plans At Same Level as Mid-November 2003

The poll, conducted Nov. 7-10, finds that 29% of adults nationwide say they will spend $1,000 or more on gifts, while 25% plan to spend between $500 and $1,000, and 35% plan to spend less than $500. The average is $730.

The most relevant comparison for spending intentions comes from past data collected in mid-November each year. Christmas spending expectations were much higher at this time in 1999, when Americans said they planned to spend, on average, $857 on gifts. Over the next three years, average Christmas spending intentions steadily declined, to $817 in 2000, $794 in 2001, and $690 in 2002. Last year, the average moved up a little to $734, almost the same amount as this year's estimate.

Americans' spending intentions change as the holiday season progresses and presumably as they actually begin to buy holiday gifts. Last year, Americans' spending estimates rose from $734 in mid-November to $776 in mid-December. Gallup will continue to measure these spending projections in the weeks ahead to see if the same pattern occurs this year.

Fourteen percent of Americans say they will spend more than last year, while 24% say they will spend less and 61% say they will spend about the same amount. These results show essentially no change from those obtained last year at this time. The net-spending intentions figure this year (percent who say they will spend more minus the percent who say they will spend less) is -10. In 2003, the net-spending intentions figure was -9 points, and in 2002 it was -15 points.

Younger vs. Older Americans

The results show a significant change in spending plans among younger Americans (those aged 18 to 29) and older Americans (those aged 65 and older).

  • The current results show a significant decrease in the amount of money that 18- to 29-year-olds plan to spend on Christmas gifts this year. On average, younger Americans plan to spend $548 on gifts, down from $677 last November. This is the lowest amount among younger adults that Gallup has recorded since 1999.
  • Although Americans aged 30 to 49 plan to spend more money on gifts than people in any other age group, the data show no change in spending intentions for this age group this year.
  • Spending plans among those aged 50 to 64 show little change since last year, from an average of $775 last year to $743 in the latest survey.
  • Older Americans are planning to spend more money on gifts this year than in recent years. Those aged 65 and older now plan to spend an average of $726 on gifts, up substantially from $544 last November. Spending plans among this age group are nearly as high as they were in 1999, when they were at an average of $736.

Average Amount of Money Spent on Christmas Presents by Age
(Based on mean value including none)

Mid-November 2003

Mid-November 2004


Change

18- to 29-year-olds

$677

$548

-$129

30- to 49-year-olds

$817

$817

+/-0

50- to 64-year-olds

$775

$743

-$32

65 years and older

$544

$726

+$182

High Income vs. Low Income Households

Higher income households, perhaps not surprisingly, plan to spend much more on gifts than lower income households. While this sentiment holds true this year, the trend shows that higher income households plan to spend less on gifts now than in 2003, while lower income families plan to spend about the same as last year.

  • Spending intentions declined by $104 over the past year among adults earning $75,000 a year or more, from an average of $1,211 in 2003 to $1,107 this year.
  • People earning between $30,000 and $75,000 a year plan to spend an average of $732 on gifts this year, essentially unchanged from last year.
  • Americans living in households with an annual income of less than $30,000 plan to spend an average of $361 on Christmas gifts this year, down only marginally from $401 last year.

Average Amount of Money Spent on Christmas Presents by Income
(Based on mean value including none)

Mid-November 2003

Mid-November 2004

Change

$75,000 a year or more

$1,211

$1,107

-$104

$30,000-$74,999

$737

$732

-$5

Less than $30,000 a year

$401

$361

-$40

The Gender Divide

Historically, men have reported higher levels of spending on Christmas gifts than women. This pattern continues today, as men, on average, plan to spend $784 on Christmas gifts this year, while women plan to spend $682. Since last year's survey, the amount of money women plan to spend has decreased just slightly, while the amount men plan to spend has remained essentially the same.

Average Amount of Money Spent on Christmas Presents by Gender
(Based on mean value including none)

Mid-November 2003

Mid-November 2004


Change

Men

$780

$784

+$4

Women

$693

$682

-$11

What Does This Mean for Retail Sales?

There is no definitive source for the actual amount of money spent each year on holiday shopping, particularly in an era in which spending is spread across many different types of retail outlets, mail order, and the Internet. It is particularly difficult to disentangle "normal" spending from holiday spending.

Nevertheless, two proxies commonly used for an overall holiday spending figure are the total amount of retail sales for November and December, and "GAFO" (general merchandise, apparel, furniture, and other), which represents sales at stores that sell merchandise normally sold in department stores. This measure includes sales at general merchandise stores; clothing and clothing accessories stores; furniture and home furnishing stores; electronics and appliance stores; sporting goods, hobby, book, and music stores; and office supplies, stationery, and gift stores. Both of these statistics are put out monthly by the U.S. Census Bureau, and correlate fairly highly with each other.

According to both the retail sales and GAFO, actual retail sales have increased each year since 1998, by an average of 5% per year. This routine increase reflects factors that are independent of the economic climate -- such as increased population and inflation.

When comparing year-to-year changes in these actual retail sales statistics with year-to-year changes in Gallup's Christmas spending intentions data, the data show there is some relationship, albeit imperfect, between Gallup's data and the hard economic numbers. In particular, when Gallup finds little change in the amount people plan to spend on gifts compared with the year prior (as is the case in 2004), this generally means that retail sales will increase by a smaller-than-average rate.

Here is a summary of the data from 1999 through 2003:

  • In 1999, Gallup saw a 31% increase in the amount of money consumers were planning to spend on Christmas gifts, compared with 1998. In fact, 1999 was a banner year for holiday sales, with spending increasing over 1998 by 8-9%.
  • In 2000, Gallup saw a 5% decline in what consumers were planning to spend, compared with 1999. Spending that year rose by 4-5%.
  • Similarly, in 2001 Gallup saw a 3% decline in consumer spending intentions, and spending rose by a weak 2-5%.
  • In 2002 Gallup recorded a steep decline of 13% in consumer spending intentions, when in fact year-to-year spending was again only up 2-4% -- not much different from the two previous years.
  • In 2003, Gallup saw a 6% increase in spending intentions, and indeed spending rose at a fairly robust 5-7%.

A linear regression analysis of the two time-series (GAFO and Gallup -- the two most highly correlated) forecasts an increase of roughly 4.5% in GAFO sales from one year ago. In other words, based on the historic relationship between these two measures, the lack of change in Gallup's estimate this year compared with last year is associated with a predicated gain in GAFO of 4-5%. That would mean an increase in spending from $214 billion to $224 billion -- a slightly smaller gain than seen last year. As noted before, however, Gallup's Christmas spending estimates typically increase as the holidays draw near, so spending estimates could be higher next month.

Survey Methods

These results are based on telephone interviews with a randomly selected national sample of 1,016 adults, aged 18 and older, conducted Nov. 7-10, 2004. For results based on this sample, one can say with 95% confidence that the maximum error attributable to sampling and other random effects is ±3 percentage points. 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.

43. Roughly how much money do you think you personally will spend on Christmas gifts this year?


$1,000 or more


$500-999


$250-499


$100-249


Under $100


No opinion ^



Median

Mean (w/ zero)

Mean (w/o zero)

2004 Nov 7-10

29%

25%

16%

17%

2%

11%

$500

$730

$778

^

NOTE: Includes those who say they do not celebrate Christmas or do not plan to spend any money on Christmas gifts.

Trends for Comparison:


$1,000 or more


$500-999


$250-499


$100-249


Under $100


No opinion



Median

Mean (w/ zero)

Mean (w/o zero)

%

%

%

%

%

%

2003 Nov 10-12

30

25

18

14

3

10

$500

$734

$773

2002 Nov 11-14

25

27

18

14

3

13

$500

$690

$743

2001 Nov 26-27

32

30

15

13

2

9

$500

$794

$820

2000 Nov 13-15

33

28

15

13

2

9

$500

$817

$847

1999 Nov 18-21

35

27

14

13

6

5

$500

$857

$893

Full Trend:


$1,000 or more


$500-999


$250-499


$100-249


Under $100


No opinion



Median

Mean (w/ zero)

Mean (w/o zero)

%

%

%

%

%

%

2003 Dec 11-14

31

28

18

13

3

7

$500

$776

$794

2003 Nov 10-12

30

25

18

14

3

10

$500

$734

$773

2002 Nov 22-24

30

30

15

15

3

7

$500

$753

$769

2002 Nov 11-14

25

27

18

14

3

13

$500

$690

$743

2002 Oct 14-17

25

26

16

14

2

17

$500

$695

$745

2001 Nov 26-27

32

30

15

13

2

9

$500

$794

$820

2000 Nov 13-15

33

28

15

13

2

9

$500

$817

$847

1999 Nov 18-21

35

27

14

13

6

5

$500

$857

$893

1998 Dec 4-6

24

25

22

14

8

7

--

--

--

1994 Dec 2-5

22

20

23

19

9

7

--

--

--

1993 Dec 4-6

19

27

20

17

8

9

--

--

--

1992 Dec 12-18

19

24

20

18

10

9

--

--

--

1991 Dec 12-15

20

24

22

19

7

8

--

--

--

1990 Nov 29-Dec 2

17

25

23

19

7

9

--

--

--

1989 Oct 12-15

18

23

25

15

4

15

--

--

--




44. Is that more, less, or about the same amount as you spent last Christmas?


More


Less

About
the same

No
opinion

%

%

%

%

2004 Nov 7-10

14

24

61

1

2003 Dec 11-14

19

21

58

2

2003 Nov 10-12

14

23

61

2

2002 Nov 22-24

19

24

56

1

2002 Nov 11-14

12

27

59

2

2002 Oct 14-17

12

22

64

2

2000 Nov 13-15

17

18

64

1

1999 Nov 18-21

19

20

61

*

1998 Dec 4-6

19

21

60

*

1994 Dec 2-5

18

20

62

0

1993 Dec 4-6

20

27

53

*

1992 Dec 18-20

22

28

50

*

1991 Dec 12-15

16

33

43

8

1990 Nov 29-Dec 2

15

26

57

2

* Less than 0.5%

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