Post by jeffolie on Nov 1, 2007 17:04:41 GMT -6
Four of 10 U.S. Shoppers Plan to Cut Holiday Spending (Update2)
By Lauren Coleman-Lochner
Nov. 1 (Bloomberg) -- Four out of 10 U.S. shoppers say they'll spend less this holiday season because of higher food and fuel costs and falling home values, according to an annual survey by Deloitte.
Of more than 14,000 people surveyed, 41 percent said they plan to reduce spending for the three months through January, the highest in at least seven years. Another 52 percent said they'll spend about the same and the remaining 7 percent plan to boost purchases. Consumers expect to cut back on home goods, entertainment, clothing and charitable gifts, the survey said.
Higher prices for milk and gasoline along with rising mortgage payments and shrinking home values have pinched consumer spending. Shoppers are also uneasy about the safety of imported products after recalls of millions of lead-tainted toys as well as contaminated fish and pet food.
``There is certainly a lower degree of optimism across the board,'' Stacy Janiak, vice chairman for retail at New York- based Deloitte, said in an interview. ``We also see concern around the stock-market volatility and housing values'' among more affluent consumers, Janiak said.
Shoppers plan to spend the same amount on gifts, the survey said, while buying less for themselves and their homes. Household goods and entertaining ``have been very important'' to holiday spending over the past six years, Janiak said.
Retail Sales Forecast
U.S. retail sales will gain 4.5 percent to 5 percent for the three months through January, compared with last year, Deloitte predicts. The National Retail Federation, a Washington trade group, forecast a 4 percent sales gain for November and December combined, the smallest in five years.
Last month, Wal-Mart Stores Inc., the world's largest retailer, introduced price cuts on toys more than two weeks earlier than in previous years and marked down 15,000 items through December, 20 percent more than last year. Tomorrow it will offer five in-store specials three weeks before Black Friday, the day after Thanksgiving that's been the traditional kickoff to U.S. holiday sales and discounts.
``This is going to be a very promotional holiday season where the retailers are going to be fighting for that consumer dollar,'' said Steven Baumgarten, an analyst at PNC Wealth Management, a Philadelphia firm with $77 billion in assets including Wal-Mart shares.
Marketing Executives
In a separate BDO Seidman survey of 100 chief marketing officers conducted last month, 73 percent predicted more discounts this holiday season, while 64 percent said they were more cautious about sales and inventory plans this year.
Consumers, in the meantime, are signaling they're more cautious about where goods are made, Deloitte said. More than half listed country of origin as a factor when weighing purchases. More than a third said they believe imports aren't safe.
Shoppers may have less to spend on discretionary items as prices for basics increase. The average price of a gallon of milk in the U.S. was $3.83 last month, 21 percent more than a year earlier, according to the Agriculture Department. A gallon of gasoline in the last week of October cost an average of $2.92, up 29 percent from October 2006.
Stock-market volatility may also reduce retail spending, Janiak said. The Chicago Board Options Exchange Volatility Index, the benchmark for U.S. share-price swings, reached a four-year high of 30.83 in August.
Wal-Mart fell $1.18, or 2.6 percent, to $44.03 at 4:01 p.m. in New York Stock Exchange composite trading. The Standard & Poor's 500 Retailing Index of 30 companies declined 14.55, or 3.2 percent, to 446.20.
The online survey queried 14,135 people between Sept. 24 and Oct. 4, and has a margin of error of plus or minus 1 percent and a confidence level of 95 percent, Deloitte said.
www.bloomberg.com/apps/news?pid=20601103&sid=aAsxYuCJIQ8g
By Lauren Coleman-Lochner
Nov. 1 (Bloomberg) -- Four out of 10 U.S. shoppers say they'll spend less this holiday season because of higher food and fuel costs and falling home values, according to an annual survey by Deloitte.
Of more than 14,000 people surveyed, 41 percent said they plan to reduce spending for the three months through January, the highest in at least seven years. Another 52 percent said they'll spend about the same and the remaining 7 percent plan to boost purchases. Consumers expect to cut back on home goods, entertainment, clothing and charitable gifts, the survey said.
Higher prices for milk and gasoline along with rising mortgage payments and shrinking home values have pinched consumer spending. Shoppers are also uneasy about the safety of imported products after recalls of millions of lead-tainted toys as well as contaminated fish and pet food.
``There is certainly a lower degree of optimism across the board,'' Stacy Janiak, vice chairman for retail at New York- based Deloitte, said in an interview. ``We also see concern around the stock-market volatility and housing values'' among more affluent consumers, Janiak said.
Shoppers plan to spend the same amount on gifts, the survey said, while buying less for themselves and their homes. Household goods and entertaining ``have been very important'' to holiday spending over the past six years, Janiak said.
Retail Sales Forecast
U.S. retail sales will gain 4.5 percent to 5 percent for the three months through January, compared with last year, Deloitte predicts. The National Retail Federation, a Washington trade group, forecast a 4 percent sales gain for November and December combined, the smallest in five years.
Last month, Wal-Mart Stores Inc., the world's largest retailer, introduced price cuts on toys more than two weeks earlier than in previous years and marked down 15,000 items through December, 20 percent more than last year. Tomorrow it will offer five in-store specials three weeks before Black Friday, the day after Thanksgiving that's been the traditional kickoff to U.S. holiday sales and discounts.
``This is going to be a very promotional holiday season where the retailers are going to be fighting for that consumer dollar,'' said Steven Baumgarten, an analyst at PNC Wealth Management, a Philadelphia firm with $77 billion in assets including Wal-Mart shares.
Marketing Executives
In a separate BDO Seidman survey of 100 chief marketing officers conducted last month, 73 percent predicted more discounts this holiday season, while 64 percent said they were more cautious about sales and inventory plans this year.
Consumers, in the meantime, are signaling they're more cautious about where goods are made, Deloitte said. More than half listed country of origin as a factor when weighing purchases. More than a third said they believe imports aren't safe.
Shoppers may have less to spend on discretionary items as prices for basics increase. The average price of a gallon of milk in the U.S. was $3.83 last month, 21 percent more than a year earlier, according to the Agriculture Department. A gallon of gasoline in the last week of October cost an average of $2.92, up 29 percent from October 2006.
Stock-market volatility may also reduce retail spending, Janiak said. The Chicago Board Options Exchange Volatility Index, the benchmark for U.S. share-price swings, reached a four-year high of 30.83 in August.
Wal-Mart fell $1.18, or 2.6 percent, to $44.03 at 4:01 p.m. in New York Stock Exchange composite trading. The Standard & Poor's 500 Retailing Index of 30 companies declined 14.55, or 3.2 percent, to 446.20.
The online survey queried 14,135 people between Sept. 24 and Oct. 4, and has a margin of error of plus or minus 1 percent and a confidence level of 95 percent, Deloitte said.
www.bloomberg.com/apps/news?pid=20601103&sid=aAsxYuCJIQ8g