For Americans, the end of summer often begets some disappointment but the holiday season that follows adds new cheer, with incessant ads, jingles, and non-stop specials prodding consumers to shop early, and shop often.
According to a survey by Creditcards.com, millions of consumers in the U.S. have already started their holiday shopping. As Labor Day marked the unofficial end of summer on September 7, a whopping 32 million Americans started checking items off their shopping lists, the survey said. That was one in seven American adults, noted Creditcards.com analyst Matt Schulz , the Voice of America reported.
“There’s a lot less pressure to buy the perfect gift when you have time to look” said Schultz. The desire to shop peacefully when crowds are less and enjoy the benefit schemes also drives the early shopping trend.
“There are smaller crowds and can take advantage of things like lay-aways.” ‘Lay-aways’ is a popular payment option offered by some stores to give consumers the ability to make smaller payments over time. Consumers can buy pricey gifts without having to use credit or avoid the burden of paying at once, said Schultz.
Nation of consumers
The United States is considered a nation of consumers. Many economists say consumer spending in the U.S accounts for 70 percent of all economic activity. For some retailers, the last two months of the holiday season normally accounts for 20 to 40 percent of their overall profits in the season.
The survey also revealed that one fourth of all adult shoppers finish their holiday shopping by the end of November. This includes parents, grandparents and those without children. Those who earn less also try to complete their holiday shopping earlier, with one third of respondents who were earning US$30,000 (AU$43115) or less noting they would finish their holiday shopping by December 1.
Low sales growth
Meanwhile, Reuters reported some of the constraints faced by holiday shoppers in the coming season. It said upper middle-class shoppers are spooked by a volatile stock market and many shoppers, expecting the best deals, are prefering to wait till the last minute. The estimate is that this would be the weakest U.S. holiday sales season for retailers ever since the recession started.
According to consultancy AlixPartners, the expected sales growth this holiday season will be in the range of 2.8 percent to 3.4 percent during the November-December period. This is much lower than the 4.4 percent growth clocked in 2014 on the basis of consumer spending trends.
The forecasted decrease will also be the lowest holiday sales performance recorded since 2010. On an average, holiday sales have been growing at 3.9 percent in the last five years, the firm said.
"What we are seeing is that consumers' behavior this year in terms of increased retail sales is fairly muted," said Noam Paransky, director of AlixPartners' retail practice and one of the authors of the report.
AlixPartners’ forecast is the first ever estimate to come from the industry and consultancy groups. It does not include sales from automotives, restaurants and gasoline. The proposed forecast by National Retail Federation for holiday sales, expected to be out by early October, is the next report to watch.
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