World-weary consumers haven't got the holiday spirit yet

Stevens, PA October 26, 2005 — Hurricanes, rising gas prices and continued hostilities in Iraq have the potential to set up a 'perfect storm' this holiday season that could be devastating to the nation's retailers. In the latest Unity Marketing ( Gift Tracker survey of over 600 consumers, shoppers expect to spend an average of only $671 on Christmas gifts this year, down 1 percent from the $678 they expected to spend on Christmas gifts at this time last year.

"Right now American consumers feel wrung out with too much bad news confronting them each night on television," says Pam Danziger, president of Unity Marketing and author of Let Them Eat Cake: Marketing Luxury to the Masses — as well as the Classes. "Given their malaise, consumers are not feeling particularly bullish about their holiday gift shopping plans. More people (22 percent) expect to spend less this year on Christmas/Hanukah gifts than expect to spend more (16 percent), which is a sign that retailers may see their hopes dashed for a strong holiday season."

"But there may be a silver-lining in the storm clouds brewing for retailers this season," Danziger continues. "What consumers SAY they are going to do and what they ACTUALLY DO often are two different things. For example, last year consumers actually spent 22 percent more buying Christmas gifts than they originally planned, $826 spent as compared with $678 planned. So as the Christmas shopping season progresses, we may see the consumers' mood pick up with stronger spending on holiday gifts as a result."

Retailers could also see strong post-Christmas spending that will start off 2006 on a positive note, since store gift certificates and gifts of cash are expected to be the most gifted item this holiday season. Nearly 70 percent of gifters say they are very or somewhat likely to give cash or a gift certificate. Not unexpectedly, discount department stores, including warehouse clubs, dollar stores and discount mass merchants, will again be the favored gift shopping destination, with 78 percent very or somewhat likely to shop for Christmas gifts in their doors.

About Gift Tracker Survey

Unity Marketing, on the forefront of market research on the gifting market, conducts a quarterly gift tracking study to measure the pulse of the gift consumer in a longitudinal survey of 500-600 gift buying consumers. Every quarter Unity tracks what gifts they bought during the past quarter, what gift occasions and holidays stimulated those purchases, how much they spent per holiday and occasion, where they bought gifts, the store and product brands they relied upon for gifts and their expectations for future purchases of gifts. The next Gift Tracker survey will be fielded end of December/early January 2006 when post-holiday gift results will be measured.

Gift Tracker gives retailers and marketers that rely upon the gift market the ability to track the ups and downs in gift purchases in real-time and discover how their target market expects to spend their budgets for buying gifts over the next three months. In addition to the four quarterly tracking studies, marketers also receive a year-end summary of luxury gift consumers' purchases and spending on the seven major gifting holidays, like Christmas, Mother's Day and Easter and twelve gifting occasions, including birthdays, anniversary, wedding, friendship, showers, housewarming and other.

For more information on Gift Tracker, click here