Christmas in October? No thanks, shoppers say
Retailers are trying to jumpstart holiday sales, but survey finds that more consumers are prepared to wait until Thanksgiving.
By Parija B. Kavilanz, CNNMoney.com senior writer
October 9 2007: 9:01 AM EDT
NEW YORK (CNNMoney.com) -- Retailers are slashing prices to try to jumpstart holiday sales, but many Americans plan to wait until after Thanksgiving to buy gifts, according to a new survey by market research firm NPD Group.
"I spotted the first holiday set-up in a store on August 18th this year - that's nearly a month earlier than last year," wrote NPD's chief retail analysts Marshal Cohen. "Retailers are looking to start the season earlier but consumers just aren't ready."
Wal-Mart (Charts, Fortune 500), the world's largest retailer, chopped prices on holiday toys by as much as 50 percent last week and plans to cut prices weekly until Christmas.
Still, 40 percent of consumers - 10 percent more than last year -said they don't anticipate beginning their holiday shopping until after Thanksgiving, according to NPD's 2007 Survey of Consumers' Holiday Purchase Intentions.
For the retail industry, holiday shopping season is crucial, since November and December account for as much as 50 percent or more of merchants' annual profits and sales.
Cohen said boring merchandise was partly to blame for the lack of enthusiasm for gift shopping.
"The hesitation comes in because there isn't that one must-have item," he said. In addition, he added, "consumers are conditioned to expect deeper discounts as it gets later in the season. [So] where's the incentive to shop early?"
The survey also tried to gauge whether the state of the U.S. economy would impact holiday sales. Only 5 percent of respondents said they would spend less over the next two months than they did last year.
"Consumers have the same number of people on their gift lists, and they tell us they have pretty much the same budget every year," Cohen said.
Clothing, electronics and toys are once again expected to be the three most-popular gift items, although consumers said they planned to buy less of each.
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Cohen expects a spike in the sale of gift cards, which are a convenient way out for shoppers frustrated by a lack of hot items. About 39 percent of respondents said they intend to buy gift cards this year.
At the same time, he said gift cards could hurt retailers because they don't promote an impulse purchase on the part of the gift buyer.
An impulse purchase includes buying something for yourself, or a gift for someone not on your list.
"In past years, impulse purchases have accounted for 26 percent of holiday sales. In 2006, that figure dropped to 19 percent. This this year we'll be lucky to hit 17 percent," Cohen said.
The survey, which polled 1,943 consumers, was conducted from Sept. 10 to Sept. 17, 2007.