As voting day looms, the big question on retailer’s minds is how spending will fair in a year that’s been marred by political uncertainty.
In a new report, the National Retail Federation (NRF) released its projections for spending this holiday season, predicting that overall holiday sales will increase by 3.6%, above the seven-year-average of 3.4%.
The NRF’s annual consumer spending survey, conducted by Prosper Insights and Analytics, found that the projected individual average holiday spending for this year will come out to $935.58 on average, the second-highest average in history, second only to last year’s record-breaking spending of $952.58 per person.
Holiday spending includes gifts for others and self-spending, food, flowers, decorations, and greeting cards for Christmas, Hanukkah and Kwanzaa.
“Everywhere you turn—whether you’re picking up a newspaper or watching television—political advertisements are taking up ad space that retailers typically use to get holiday shopping on the minds of consumers across the country,” said Matthew Shay, NRF president and CEO. “Once the election has passed, we anticipate consumers will pull themselves out of the election doldrums and into the holiday spirit.”
The NRF conducted a separate poll which showed that more than 25 percent of consumers reported that the election will affect their holiday spending plans, and that 43 percent admit to being more cautious in their spending due to the impending election and the accompanying political uncertainty. However, researchers expect this to change after the election.
“Retailers should prepare for a rush of consumers in the weeks following the presidential election as they get more economic and political certainty and are looking to take advantage of promotions and deals that are too good to pass up for their friends, family and even themselves,” said Shay.
More consumers report plans to make purchases for themselves—$139.61 on average—up 4 percent from last year’s $133.74, making this year the second-highest level of personal spending over the survey’s 13-year period.
“Many shoppers are taking the approach of ‘one for you, two for me’ this holiday season,” said Shay. “Retailers are preparing by offering a wide array of merchandise and promotions—items shoppers want to give as great gifts at prices so good they want to buy for themselves too.”
More than half of all shoppers say they plan to make most of their purchases at department stores (56.6%), while nearly the same amount say they plan to shop online (56.5%), either exclusively or in addition to shopping through more traditional channels.
The survey also found that 41.4% of consumers plan to begin their holiday shopping in November, while only 15 percent plan to shop the first two weeks of December.
“While many holiday shoppers are starting early on their gift lists, Millennials are waiting to catch the best deals for their gifts, with nearly half (46 percent) waiting until November to start shopping,” said Pam Goodfellow, Prosper Insights principal analyst. “Younger consumers are likely to be looking forward to the Thanksgiving/Black Friday shopping ‘experience’—and know that retailers will be offering great promotions that weekend.”