While consumers spent more this holiday season than a year ago, their spending was about 14 percent below what pre-holiday surveys said they would spend.
According to the American Express Retail Index second annual holiday spending re-cap, consumers reported that they spent 15 percent more this year versus last year. More than half (55 percent) of retailers reported that the 1998 holiday season was stronger than 1997, with one-third (33 percent) of those saying sales improved by 10 percent or more.
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The holiday spending re-cap is based on two surveys, one of 500 consumers and one of 275 retailers, conducted Dec. 28 – 30, 1998.
According to the study, shoppers spent an average of $1,148 on total holiday expenses, 14 percent less than they said they would spend when surveyed just before the holidays. Among the survey findings:
Spending on gifts increased 12 percent this year ($865 versus $769 in 1997).
Average spending on entertaining was $134.
Travel spending averaged $45.
Decorations and gift wrap spending averaged $64.
Men outspent women on gifts by $105 ($929 versus $824).
Northeasterners spent $944 on gifts this season, more than any other region in the country.
The American Express survey found that more than half (53 percent) of retailers said the holiday season started strong and hit peaks immediately before and after Christmas. Such a trend was confirmed by consumers, 43 percent of whom said they completed their shopping in the two to three days prior to Christmas and 20 percent of whom said they shopped for gifts the day after. In fact, 30 percent were planning to shop for gifts into the New Year.
“Although consumers expected to complete their shopping earlier, our post-holiday survey indicates that the majority of holiday retail sales occur during last-minute Christmas and post-holiday spending peaks,” said John Theiss, vice president of retail accounts for American Express.
Three times as many consumers reported using the Internet for holiday gift-buying in 1998 over 1997 (6 percent versus 2 percent), according to the survey. Retailers, according to American Express, said that online sales tripled this season versus last season.
Despite the growth in online shopping, in-store shopping still dominated the holiday season. Overall, the most popular place to shop was department stores (53 percent), followed by discount department stores (43 percent), clothing stores (18 percent), toy stores (16 percent), electronic stores (13 percent), specialty stores (11 percent), and music/video stores (7 percent).
Close to half (44 percent) of adults surveyed said they splurged on at least one person this season. More than one-third splurged on a spouse/partner (36 percent) or a son/daughter (34 percent). Splurging budgets, according to the survey, surpassed pre-holiday predictions by 12 percent ($456 versus $407), and reflected a slight increase over last year ($449).
According to American Express, 39 percent of retailers reported more frequent use of credit cards this year compared with last year. Consumers used a variety of payment methods including checks (38 percent) and ATM/debit cards (15 percent). Seventy-two percent of holiday credit card users report that they will pay off their holiday bills by the end of this month.
