Entering the Holiday Shopping Season (Beware Surveys!)

With Halloween upon us, we are about to enter the prime US Holiday shopping season. So far, advertising has been subdued. Even without big inventory, we are likely to see significant discounting in the coming months, with sales and promotions dominating.

The bottom line: It is a buyers market.

This time of year, we also will see lots and lots of surveys. On the whole, these tend to be mostly meaningless, if not horrifically wrong. We have seen surveys forecasting 22% holiday sales gains, only to see low single digit improvements. The Media dutifully report these false forecasts, despite the fact that Humans are terrible at forecasting their own behavior. What you primates say versus what you actually do are quite frequently two different things.

Deloitte Consulting did a rather extensive survey of 10,878 consumers from Sept. 24 to Oct. 2 — much broader than the typical surveys we see.

“U.S. shoppers will buy fewer gifts and spend more on items such as clothes, entertaining and home furnishings during the holiday season, according to consulting firm Deloitte LLP.

Fifty-one percent of consumers polled said they hope to spend at least as much as last year during the holiday season, according to a survey to be released today. Fewer presents will be purchased, the study showed. Shoppers plan to cut spending on gifts to $452 from $532 last year and $569 in 2007.

Consumers who have deferred spending on home goods and clothing for themselves will come out to seek bargains, said Stacy Janiak, vice chairman and head of U.S. retail at New York- based Deloitte.”

The most interesting aspect of the survey response to me is the plan to spend more on home goods — perhaps this reflects an acceptance of the changing lack of mobility in residences.  Many underwater or constrained homeowners are realizing they are going to be  stuck where they are for some time to come. Hey, might as well make the best of it.

I am less inclined to agree with Marshal Cohen, chief industry analyst for NPD Group, who claims consumers are suffering from “frugal fatigue.” After a 50 year credit binge, a season or two of modest spending is hardly exhausting.

The bigger issue is if they are suffering from a surplus of debt and a dearth of credit. Perhaps a better phrase than “frugal fatigue” might be “lack of cash/credit syndrome.”

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Holiday shopping seasons from 1993 to 2008

Data courtesy of Deloitte Consulting

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Sources:
Holiday Cheer Makes a Comeback
Consumers are warming up to spending, although gift giving is expected to decline
Deloitte, October 28, 2009
http://bit.ly/bwr2b

Holiday Sales: Historical Data
http://bit.ly/1Dzzg5

Shoppers Plan to Buy Fewer Gifts, Spend on Home
Lauren Coleman-Lochner
Bloomberg, October 28, 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=an3zomxVQe.M

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Previously:
Holiday Sales Numbers Don’t Add Up (December 1st, 2005)
http://www.ritholtz.com/blog/2005/12/wsj-holiday-sales-numbers-dont-add-up/

More Bad Data from the NRF? (November 2006)
http://www.ritholtz.com/blog/2006/11/more-bad-data-from-the-nrf/

Repeat After Me: Spending Surveys Are Meaningless (October 2007)
http://www.ritholtz.com/blog/2007/10/repeat-after-me-spending-surveys-are-meaningless/

How Good Were Holiday Sales Really? (January 2008)
http://www.ritholtz.com/blog/2008/01/how-good-were-holiday-sales-really/

Spinning Black Friday Retail Sales (December 1st, 2008)
http://www.ritholtz.com/blog/2008/12/spinning-black-friday-retail-sales/