18% see the economy as better than last year
56% fell the economy is worse than last year
42% plan to spend less than last year
85% are likely to shop at discount stores
12% plan to shop at designer/boutique stores
54% plan to purchase some gifts on-line
51% plan to shop within 15 miles of home
8% plan to travel more than 45 miles to shop
54% plan to give gift cards as presents
52% plan to use cash or debit for purchases
GSU's Bureau of Business Research and Economic Development (BBRED), in conjunction with Dr. Jacqueline Eastman's Marketing Research classes, conducted COBA's semi-annual consumer survey, which focuses on consumer behavior in the 12 counties within Georgia's Coastal Empire and South Carolina's Low County. After polling 527 individuals by phone, BBRED has concluded consumers will be cost and value conscious this holiday season, despite being less pessimistic about the economy than this time last year.
BBRED Director Ed Sibbald said he anticipates that overall revenue for the majority of retailers will be relatively flat this season. Despite the fact that he thinks unit volume will likely be up, he said revenues will stay flat or improve only slightly due to tighter profit margins resulting from deep discounting by stores and downsizing of individual purchases by consumers.
“It won't be a 'bah-humbug' Christmas in terms of a further decline in sales, but the retail elves should not be clicking their heels because people will be watching their wallets very closely,” Sibbald said. “Last year unit sales increased at the retail level, but revenues were down because of the huge discounts that were offered. Value shopping will be key again this year.”
According to the survey, consumers are taking a “wait and see” approach and scaling back on holiday spending this year. Forty two percent of survey participants plan to spend less this year than last year and participants intend to spend an average of $75 per gift, which is significantly lower than the $101 spent per gift in 2008 or the $132 spent per gift in 2006 when the economy was at its peak.
As a result, participants intend to “value shop” - seeking bargains and aggressively discounted items. Approximately 36 percent of participants are looking for 25-50 percent discounts, while another 15 percent are holding out for 75 percent discounts. In addition, 85 percent of survey participants said they are likely or somewhat likely to shop at discount stores to stretch their holiday dollar.
“It's back to basics. It's not designer watches but CDs, books and scarves,” Sibbald said. “People are getting away from extravagant gifts and downsizing. They're going back to shopping for basic needs and value-oriented products.”
In keeping with the trend of fiscal responsibility and the tendency for people to shy away from addition debt, 52 percent of participants plan to buy gifts using cash and debit cards. According to the BBRED's analysis, it appears participants are using cash and debit card purchases to control spending.
“People are looking to spend cash; they want to spend the money they have in their pockets,” said BBRED research associate Ben McKay. “Consumers want to believe they will be more responsible with their credit.”
One positive for local retailers that they survey uncovered is that consumers are planning to shop closer to home this year. While more than 50 percent of the participants said they plan to shop within 15 miles of their home, only eight percent plan to travel more than 45 miles for holiday shopping.
Phil Boyum may be reached at (912) 489-9454.