Holiday 2009: More Say They Will Spend Less

According to the NPD Group’s annual survey of consumers’ holiday spending intentions, 30% of those surveyed said they plan to spend less this holiday, a four-point increase over last year’s results.

“That four percent increase is certainly a sign of the times. On the other hand, that four percent is not as dramatic as it could have been,” said Marshal Cohen, chief industry analyst, The NPD Group. “I think consumers will be looking for the right gift, rather than the most extravagant or expensive one. That combined with the soft numbers we are up against from holiday last year, and I think we will see growth, albeit a modest 0.5-1.5 percent.”

NPD expects a return to more traditional holiday gifts this season. “The survey results point to a return of more gifts being made of sweaters, fragrances, music, books, movies,and wallets, again,” noted Mr. Cohen, “We are also seeing makeup and TVs showing signs of growth.”

According to NPD, the top items consumers plan to buy as gifts are: apparel, toys, movies, books, electronics and peripherals (digital cameras, MP3 players). While there is no change in the top five categories, survey results show some upward movement in consumer purchasing intentions for items such as accessories, music and fragrances. According to NPD, fragrances moved up one spot in this year’s survey to ninth place on the list of items consumers planned to give as gifts.

What will motivate consumers to purchase this holiday? Value. According to NPD, 62% of respondents stated value plays a big role in determining what and where they buy, followed by “special sale” at 61%.