While a 4% rise in Christmas spending may not be enough to substantially lift the revenue at healthy retailers or repair the problems at weaker ones, it is a rate better than during the years of the recession. Gallup researchers report spending will indeed eclipse that of 2008 and 2009.
Specifically, Gallup researchers have found:
Americans’ initial estimates of the total amount they will spend on Christmas gifts this year point to an above-average holiday season for the nation’s retailers. While Gallup’s October spending forecast is a warm-up to its key measure in November, it finds Americans expecting to spend $781, on average, up from $704 last November.
The figure was $616 in 2008 and $638 in 2009.
The recovery is uneven because of the ongoing pessimism among some consumers:
While most Americans, 60%, say they will spend the same amount on gifts this year as in 2013, the percentage saying they will spend less is now 24%, slightly below last November’s 26%.
Further, spending is unlikely to recover to the levels of eight years ago:
These preliminary projections are positive, but it is important to note that Americans’ estimates of the total amount they will spend on gifts can change as the holiday season progresses. Last year, Americans’ average spending estimate fell by about $80 between October and November, and in 2008 and 2009, Gallup saw sharp declines in intended spending. By contrast, in 2011, the estimate rose by about $50 between October and November. In 2010, it stayed exactly the same.
As is true with every holiday season, the key to relative success at any large retailer is the extent to which it can gain and hold market share. It is hard to imagine the worst-off retailers will increase their pieces of what is still a modest-sized pie. That means it could be a hard holiday for the likes of J.C. Penney Co. Inc. (NYSE: JCP) and Sears Holdings Corp. (NASDAQ: SHLD). For them, the 4% increase in overall spending this Christmas season will fall short of what they need.
Methodology: Results for this Gallup poll are based on telephone interviews conducted Oct. 12 to 15, 2014, with a random sample of 1,017 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
For results based on the total sample of national adults, the margin of sampling error is ±4 percentage points at the 95% confidence level.