Floridians plan to spend little more than last year this gift-giving season
GAINESVILLE, Fla. — Florida’s retailers are in for a repeat of last year’s dismal holiday season, with consumers expecting to spend about the same amount of money on gifts, a new University of Florida survey finds.
“People are going to be very cautious about spending because of continued uncertainty over the economy, job security and housing values,” said Hyunjoo Oh, research director of the David F. Miller Center for Retailing Education and Research at UF. The survey was conducted by the center and UF’s Bureau of Economic and Business Research and based on telephone interviews with 553 Floridians in October.
Concern over jobs prompted a three-point drop in Florida’s consumer confidence this month, according to another survey by the bureau. (See related news release).
Surprisingly, consumers are optimistic about their shopping intentions, with 58 percent of those surveyed saying they plan to spend as much or more than they did last year, compared with 52 percent who said the same thing in 2008, Oh said.
But the average amount they predict spending over the holiday season — $1,071 – amounts to only $6 more than the $1,065 they anticipated paying for presents last year, she said.
The contradiction may be explained by people being in the mood to splurge because they spent less last year, Oh said. “Even though they are willing to spend, they’re going to be very conservative by looking for more practical gifts and trying to find ways to save money,” she said.
Still, retailers may be unprepared for this year’s holiday shoppers because of slim inventories, which could cause them to run out of popular items, Oh said. Last year retailers were left with a large amount of unsold inventory they were forced to liquidate, placing some in financial jeopardy, she said.
“In light of consumers’ concerns about the economy, retailers have been reducing this year’s inventories below the level of 2008, a holiday season that was the worst retailers experienced in more than 50 years,” she said. “If it turns out that some products are really ‘hot items’ in their appeal to consumers, retailers may not be able to respond to the demand.”
Online retailers may be best off in these tough economic times because many shoppers like to search for deals on the Internet, Oh said. Online retailers have prepared for bargain hunters by packaging gift ideas for different budgets, creating and displaying promotional categories for products that are less than $25, for example, or between $25 and $50, she said.
“Online retailers have collected information from shoppers’ online search behavior about what are the ‘hot items’ to better prepare their merchandise for packaging,” she said. “Because such information helps retailers prepare the right merchandise with the right quantity, on-line retailers or multi-channel retailers who have both online offerings and stores are in a better position than stores that are strictly brick and mortar.”
Because many shoppers conduct online searches for gift ideas and buy later at stores, those retailers who best use online search data in making inventory allocation decisions will have better opportunities to maximize revenues and profits, she said.
Twelve percent of survey participants said they would spend more than last year at Web sites, compared with 2.6 percent in stores in enclosed malls and 3 percent through catalogs.
Online shopping is expected to draw more visits from high-income households, with 74 percent of those with family incomes over $100,000 planning to shop as much or more than they did last year on the Internet, compared with only 35 percent of those with incomes less than $30,000, she said.
For all holiday shopping, 66 percent of consumers in high-income households plan to spend more or the same amount that they did last year, compared with 48 percent from those with the lowest incomes, the survey found.
Fifty-nine percent of shoppers from middle-income households – those earning between $30,000 and $60,000 – plan to spend more or the same amount that they did last year, as do 60 percent of those with upper-middle incomes, between $60,000 and $100,000, she said.
As expected, the lowest income group expects to spend the least, an average of about $500, Oh said. Estimates for the middle income group are about $844, the upper-middle income group $1,277 and the high-income group $2,197.
The survey had a margin of error of plus or minus 3 percent.
- Cathy Keen, firstname.lastname@example.org, 352-392-0186
- Hyunjoo Oh, email@example.com, 352-273-3291