New York City -- A survey released Wednesday by Deloitte found that 66% of consumers say their financial situation is the same or better compared to this time a year ago, and 62% plan to spend the same or more on the holidays.
According to Deloitte’s 25th Annual Holiday Survey, which polls consumer spending intentions and trends, not all consumers have such a rosy outlook. Half (50%) of consumers feel the economy is either in a recession or heading back into one.
Despite the mixed view, one group of consumers -- the $100,000 and higher income bracket -- is leading the upswing in sentiment with 45% of households feeling the economy will improve next year, compared with 39% of all other survey respondents. Additionally, 52% say their job is extremely or very secure, 10 percentage points higher than the survey average. This group is also planning to splurge the most on the holiday season, spending a total of $826 on gifts this year, 77% higher than all survey respondents.
“Consumers who are feeling secure in their financial situation appear more willing to engage in some retail therapy, satisfying some pent up demand,” said Alison Paul, vice chairman and retail sector leader, Deloitte LLP. “At the same time, there are households that remain focused on necessities due to a job loss or other issues impacting their incomes. Other consumers report an improvement in their personal finances, yet remain cautious about the economy.”
According to the survey, different spending habits appear across demographic age groups, with the 45- to 60-year-old age group seemingly most affected by economic concerns. Four out of 10 respondents indicate their household financial situation is worse compared to last year at this time, compared with 35% of overall respondents. The highest number of respondents who said they will spend less this holiday season (46%) and that they have permanently cut back on the amount of money they spend (41%) came from the 45- to 60-year-old age group.
Conversely, in the 18-to-29-year-old age group, 37% cited careful spending throughout the year as a reason they’re hoping to spend more on the holidays. While their expected gift spending is lower than other age groups, they may make it up in non-gift spending plans as they expect to spend 50% more than the average on entertaining at home, non-gift clothing, socializing and home/holiday furnishings combined, bringing their total holiday spend on gift and non-gift items to $1,394, compared with an average of $1,160 among all survey respondents.
Deloitte asked consumers to share their views on the most significant shopping changes in their lifetimes. In response, consumers frequently cited the Web’s influence on their shopping. Almost half (46%) said that today they are smarter about prices as a result of comparison shopping online. Nearly four out of 10 (37%) indicate shopping is simpler because of the ability to shop in stores and online to find items they want. Also, one-quarter (25%) of consumers said the ability to check online recommendations from others has given them more confidence in buying a product.
In addition to online channels, consumers are also turning to smartphones to make the most of their holiday budgets this year. The 18-to-29-year-old age group is expected to drive a significant portion of mobile use this holiday season, with 37% planning to use their mobile phones during the shopping process. This group also ranks mobile/smartphones No.1 on the list of products or technologies that had the most significant impact on their lives (60%).