As we approach the 2011 winter holidays, Americans remain fixated on finances: their own and that of the nation. Four in 10 of those surveyed by Consumer Reports said their biggest concern going into the holidays was the state of the economy and having enough money in their own pockets.
After the economy, Americans’ said weather was their top concern, cited by 11 percent of respondents, who apparently haven’t forgotten the harsh winter of a year ago (the survey was conducted prior to this weekend's pre-Halloween storm in the Northeast). By contrast, only 2 percent of respondents cited health as their primary concern.
Our poll -- the first in a series of holiday polls designed to capture the mood, outlook, and spending habits of consumers nationwide -- suggests that relentless chatter about tough times is taking its toll on shoppers’ psyche, putting a slight damper on their holiday cheer, how much they buy, and how they pay for it. When it comes to our collective mood, one in three Americans surveyed said they expect to be happier this holiday season than last. When we asked the same question last year, 40 percent expected to be happier in 2010 than they were in 2009.
Not surprising, consumers tell us they plan to watch their dollars carefully, continuing a trend that began in 2008. Planned spending may be down slightly this year, according to the poll; one in three consumers say they’re cutting back on purchases, while more insist they’ll commit to a budget this year (52 percent vs. 47 percent in 2010). And, once again, the bargain hunters will be out in force: 44 percent of respondents feel that getting a good deal is more important now than it was in 2010.
But take some of those numbers with a grain of salt. However noble their intentions, shoppers tend to underestimate their spending. Leading up to last year’s holidays, for instance, respondents anticipated spending an average of $457 on gifts, but in actuality ended up spending $556 -- 22 percent more. Moreover, 45 percent of those who made a budget last year exceeded it. Five percent went over budget by a lot.
When Americans do scale back on holiday giving, they’re most likely to economize on gifts for themselves (cited by 40 percent of respondents); vacation travel (36 percent); decorations (35 percent); and presents for their pets (30 percent). Twenty percent said they intend to tip less.
Last year, more than half - 53 percent - of Americans paid for some or all of their purchases with plastic, charging $433, on average, worth of gifts. That’s slightly higher than the percentage that relied on credit the previous year. However, heavy credt-card users have mended their ways at least somewhat. The percentage of shoppers who charged $1,000 or more dropped in 2010 to 16 percent, down from 23 percent in 2009.
Unfortunately, too many consumers still carry too much debt for too long. As of this month, 6 percent of Americans - around 14 million people - were still paying off their credit-card purchases from the 2010 holidays.
Practicality is vogue this season. Seventy percent of respondents plan to give apparel as a gift, followed by electronics (65 percent), gift cards (62 percent), and cash (55 percent).
Within electronics, video games and accessories are expected to be top sellers, followed by MP3 players and iPods, e-book readers like the Kindle and Nook, video-game system like the Xbox and Wii, headphones, and laptop, notebook, and tablet (iPad) computers.
Gift cards, while still very popular, aren’t quite as ubiquitous as they once were. The percentage of consumers who received gift cards dropped from 62 percent in 2007 to 48 percent in 2010, even though the cards don’t have as many strings attached to them as they used to such as short expiration dates and inactivity fees. But consider this: According to our poll, many recipients - two-thirds of those surveyed - typically spend more than a card’s face value, while a significant percentage of cards go unused because people forget about them, say they didn’t have time to use them, or shoppers indicate they couldn’t find anything they wanted. A quarter of recipients still have one unused gift card from the 2010 holiday; 55 percent have two or more unredeemed cards.
Consumer Reports first 2011 Holiday Poll: Key numbers at a glance
- Nearly half of those surveyed said their chief concern going into the holidays is their personal financial situation and the nation’s economy. Weather came in a distant second.
- Thirty-three percent of Americans expect to be happier this holiday season than last. When we asked the same question last year, 40 percent expected to be happier in 2010 than they were in 2009.
- Overall gift spending is expected to be a bit less last year; one in three consumers says they’re cutting back on purchases.
- More consumers insist they’ll live within a budget this year (52 percent vs. 47 percent in 2010). But if history is any indicator, many will fail. Forty-five percent of those who made a budget last year exceeded it; 5 percent went way over budget.
- Shoppers continue to look for bargains. Forty-four percent of respondents feel that getting a good deal is more important than it was in 2010.
- Shoppers tend to underestimate their spending. Last year, consumers actual spending ($556) was 22 percent higher than their anticipated spending ($457).
- When Americans do scale back on giving, 40 percent said they’re most likely to economize on gifts for themselves, 36 percent say they’ll do less vacation travel; 35 percent plan to skimp of holiday decorations, and 30 percent will buyer fewer presents for their pets.
- Last year around half of Americans charged at least some of their gift purchases, and this year we expect consumers to rely less on credit and debit-card payments. The trend away from credit-card usage among people who charge a lot -- $1,000 or more - declined to 16 percent in 2010, compared to 23 percent in 2009.
- As of October 2011, 6 percent of Americans - 14.1 million people - were still paying off credit-card purchases from the 2010 holiday season.
- Seventy percent of respondents plan to give apparel as a gift this season, followed by electronics (65 percent), gift cards (62 percent), and cash (55 percent).
- Forty-eight percent of Americans intend to give gift cards, down from 62 percent in 2007.
- Two-thirds of those surveyed spend more than their face value of the gift cards they receive. Twenty-five percent of respondents have an unused gift card from last holiday season; 55 percent have two or more unredeemed cards.