Government gridlock will impact holiday spending this year, with consumers trimming their gift-giving budgets by an average of $14 from last year because of economic concerns, according to the National Retail Federation.
The retail trade association on Wednesday said consumers will reduce their holiday spending because of the nation’s continued economic uncertainty, despite earlier projections for a marginal holiday sales gains.
The group’s annual holiday consumer spending survey found that the average holiday shopper will spend $737.95 on gifts, decor, greeting cards and other seasonal items. That’s a 2 percent drop from the $752.24 consumers actually spent last year, officials said.
The retail federation last month forecast a holiday sales increase of 3.9 percent to $602.1 billion. The 10-year average for holiday sales growth is 3.3 percent.
“Though the foundation for solid holiday season growth exists, Americans are questioning the stability of our economy, our government and their own finances,” said Matthew Shay, the group’s president and chief executive, in a statement. “We expect consumers to set a modest budget for gifts and other holiday-related purchases as they wait and see what will become of the U.S. economy in the coming months,” he said.
More than half of consumers surveyed said the economy would in some way impact how they spend this holiday season. The retail federation reported that 79.5 percent plan to spend less overall.
Nearly 30 percent of respondents said the political gridlock in Washington D.C. around the nation’s fiscal concerns would affect their holiday spending plans, particularly those in the 55-64 age group.
The survey found that many consumers plan to cut back on gifts for themselves, despite an abundance of seasonal bargains, in order to buy gifts for family and friends. “Self-gifters” will spend an average of $129.62 this year, down from a survey high of $140.43 last year year and $137.17 in 2011, officials said.
The biggest portion of shoppers’ budgets will go toward gifts for family members, with the average person planning to spend $415.50 on loved ones, down nearly 2 percent from the actual $423.36 they spent last year.
Officials said consumers will spend an average of $72.14 on friends; $23.59 on co-workers; and $25.63 on others, such as pets and community members.
Consumers are expected to spend an average of $100.35 on food and candy; $28.03 on greeting cards; and $21.12 on flowers.
Total spending on holiday decor will reach $6.8 billion, with the average person spending $51.60 on decorations, according to the survey.
The average American will complete about 39.5 percent of their holiday shopping online, up from 38.8 percent last year and the highest amount in the survey’s history, officials said.
The retail federation’s digital division, Shop.org, is forecasting online holiday sales will grow between 13 and 15 percent to as much as $82 billion. That projection is based on data collected by the U.S. Department of Commerce and other federal agencies, rather than holiday spending survey responses.
The survey polled 6,415 consumers and was conducted Oct. 1-8 by Prosper Insights and Analytics.
The holiday season can account for 20 percent to 40 percent of a retailer’s annual sales, and accounts for about 20 percent of total industry annual sales, according to federation officials.