Consumer Reports poll: Slumping economy has Americans changing holiday traditions, delaying shopping

Consumer Reports News: December 15, 2008 06:02 PM

With more and more families facing financial challenges, nearly 70 percent of Americans are economizing on their gift-giving this season, according to the third and final installment of Consumer Reports Annual Holiday Poll. Specifically, 37 percent of those surveyed said they’re setting a spending limit, 14 percent are making homemade gifts, and 6 percent have decided not to exchange gifts at all. In fact, cost-cutting is such a big deal that 12 percent of respondents said they’re already scheming to re-gift at least on present they receive. Bah Humbug! 

Besides cutting back, more consumers are putting off shopping. Until now, the shopping pace had been similar to the pattern we observed during the past two years. But the pace has slowed. As of Dec. 7, only 56 percent of Americans had begun to shop. That’s down 6 percentage points from the same time in 2007, and 10 percentage points lower than in 2006. 

Regardless of how far along Americans are, 29 percent don’t anticipate finishing shopping until Dec. 23 or later; 10 percent don’t expect to be done until moments before Christmas Eve turns into Christmas Day. 

But even the holiday itself won’t mark the end of the shopping season, as 44 percent of those surveyed expect to hit the malls during the week between Christmas and New Years to take advantage of sales and focus on buying gifts for themselves. 

The nationwide survey of 1,000 Americans, conducted by the Consumer Reports National Research Center, revealed that shoppers plan to spend an average of $740 each; one in five told us they intend to spend $1,000 or more. The figures closely mirror those of 2007.   

 

Related:
- Americans look forward to a happy, but less plentiful, holiday season
- Electronics holiday buying: Down but not out
- Holiday shopping off to a slow start; big Black Friday predicted

 

Married men anticipate digging deeper into their pockets than any other demographic group, earmarking $998, on average, for gifts. Who are the “worst” gift-givers? The answer might surprise you: Seventeen percent of those surveyed cited parents and in-laws; 16 percent called out friends and coworkers. 

If there’s an upside to the sour economic picture, it’s that consumers have ample opportunity to score a bargain. One in four shoppers said this year’s deals are superior to those offered in 2007; the figure was even higher among shoppers 55 and older, one-third of whom felt the bargains were more impressive this year. Overall, only 13 percent of shoppers felt this year’s deals were worse than those of a year ago. 

Consistent with last year’s findings, most Americans (76 percent) are shopping at mass merchants like Walmart and Target, followed by department stores (54 percent), and online retailers (48 percent). But e-tailers have finally pulled even with the mass merchants in terms of where Americans say they’re unearthing the best deals this year. 

Among shoppers who buy online, half feel that the Internet is the source of the biggest bargains, up dramatically from 32 percent last season. 

Another bit of good news: Although half of Americans plan on charging their holiday purchases, up slightly from 45 percent last season, they expect to put less on plastic. On average, respondents said they’ll probably finance $682, on average, for gifts. Last year, the figure was $723. 

Despite the credit crunch, nearly half of shoppers – particularly women and younger consumers -- told us that salespeople tried to pressure them to sign up for a store credit card to qualify for instant savings on their purchases. That’s a pitch you’re probably better off resisting. Among consumers who opened such an account last year, 46 percent said they never used the card again; 24 percent said they regretting opening the account; and 20 percent said they incurred high finance charges or penalties. 

As it is, nearly two-thirds of respondents don’t anticipate having their holiday credit-card debt paid off until March or later. But with interest rates at 12 to 13 percent, you want to avoid getting in over your head and carrying a balance for any longer than is absolutely necessary. 

You’re better off making a budget and paying by cash, which is what most consumers (76 percent) still do. But substantially more are opting for debit cards. Debit-card usage has risen to 51 percent this year from 40 percent in 2007. Also on the rise is the use of layaway; seven percent of those surveyed plan to use the service (in which you pay for your purchase in weekly interest-free installments and take ownership only after the item is paid for in full), popularized by retailers including Kmart and Sears. 

Finally, our survey shows a slowdown in the purchase of one of the most popular presents of recent years. Last season, 34 percent of shoppers had purchased at least one gift card by now. This year, the figure has dropped to 27 percent. 

In addition, the holidays would not be complete without commenting on gift returns. According to our survey, one in five shoppers plans on returning some of the gifts they receive. We’ll be reporting on that in the weeks to come. 

Marc Perton


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