Consumer spending expectations continue on the upswing as Christmas approaches and fears of a hurricane-induced recession fade. Retail Forward Inc.`s Future Spending Index rose to 97.3 at the start of December, up from 96.8 at the beginning of November and 94 in October. It had tumbled from 104.6 at the start of September, the highest since January’s 104.9.
"The key underlying theme in this month`s results is the sustained recovery in job security from the hurricane-induced jitters," said Steve Spiwak, economist with Columbus, OH-based researchers and consultants Retail Forward. "That positive trend means retailers can expect shoppers to continue opening their wallets during the all-important December shopping month."
Shoppers plan to spend $671 on average during the holidays, Retail Forward’s ShopperScape survey shows. Clothing is the most popular gift, followed by toys, books, music and electronics. Gift cards are also on most shoppers` lists, Retail Forward reports.
Retail Forward’s survey also shows that online stores are the third most popular type of shopping venue, with 38% of all consumers planning to shop online this holiday season. 61% will shop at discount stores and 38% at value department stores. The percentage of consumers shopping online rises with income: 25% of down market consumers will shop online, 37% of middle market and 49% of up market. 3% of respondents said they are not doing any holiday shopping.
Interestingly, Retail Forward reports that down market households (up to $22,500 in household income) have the highest future spending index, at 109.5, up three points from last month. The index for the middle market ($22,500-$75,000) stood at 93.3, down from 95.1. The up market index rose to 97.3 from 94.9.
Retail Forward forecasts 5-5.5% retail sales growth during the holiday period. 15% of all shoppers plan to spend more this year on holiday gifts compared to last year.