Holiday Shopping 2005 - 'Tis The Season for Giving

Gift cards, philanthropic giving strike chords with consumers, according to 20th Anniversary Deloitte Annual Holiday Mood Survey

- Gift cards still a favorite in Southern California -

Gift Cards and Gift Certificates online

Despite predictions by many of a gloomy holiday season for retailers, 68 percent of households surveyed nationwide said they are likely to spend the same or more this year than last, according to the 20th Anniversary Holiday Mood Survey of retail spending and trends, commissioned by Deloitte & Touche USA LLP. Consumers in Southern California are slightly more optimistic, with 72 percent planning to spend the same or more during the holidays than last year.

While overall spending is expected to increase, spending on gifts is expected to go down slightly from last year, reflecting the focus on other spending categories. These survey findings support Deloitte's expectations that nationally, non-auto holiday sales will increase in the 6-6.5 percent range during the November-to-January period, less than last year's exceptional 8.6 percent increase, but still above the last decade's average growth rate.

However, the survey also found that consumers aged 55 years and older plan to spend 22 percent more on gifts than the average consumer ($735 vs. $604), reflecting the affluence of the baby boomer generation.

"Consumer spending levels have remained relatively steady over the past several years, which should point to a positive holiday season again this year," said Jackie Fernandez, partner-in-charge of the Los Angeles retail practice of Deloitte & Touche LLP. "Retailers who provide the right inventory at the right prices and maximize their customer service will reap the biggest rewards."

Gift Cards Remain the Top Gift Purchase

Gift cards remain the No. 1 gift purchase this year, with 67 percent of nationwide respondents indicating that they will purchase an average of 4.9 cards, making them even more popular than last year, when 64 percent nationally purchased an average of 4.7 cards.

Southern California shoppers buy even more gift cards, with 66 percent planning to purchase an average of 6.1 cards this year, compared to that same percent last year who indicated they would buy 5.1 cards. The growing use of gift cards places added importance on post-holiday retail sales as shoppers redeem them. Half of respondents said they had unredeemed cards from last year, and some reported holding cards that were five or more years old.

'Tis the Season for Giving

This holiday season, Americans will put their hard-earned money to work by giving to charitable causes. Charitable donations ranked fourth in national spending categories, exceeding planned spending for holiday entertaining at home, non-gift clothing and holiday furnishings, which all showed sharp declines from last year.

These expected spending levels appear to reflect continued contributions for the victims of Hurricane Katrina and the earthquake in Pakistan, as well as a focus on providing for others rather than for buying for oneself and one's family.

Time Pressures, Energy Prices Mean Fewer Shopping Trips

Higher gas prices, time pressures and the long-term growth in Internet shopping are also expected to result in fewer shopping trips and few stores visited this holiday season. This continues a trend that has evolved over two decades -- 80 percent of respondents said they shop at fewer stores today than they did twenty years ago.

Proliferation of Retail Creates More Choices But Fewer Favorites

When asked about their favored shopping venues from 20 years ago, consumers had two strong favorites: 67 percent did most of their shopping at either a traditional department store or a discounter. Today, consumers have no clear favorite.

The top two choices, discount department stores and the Internet, were preferred by only 46 percent of respondents combined. Southern Californians shop an even more diverse number of venues: discount department stores and the Internet were favored by only 35 percent of respondents combined. Traditional department stores were the third venue choice overall, with 13 percent of respondents nationwide favoring them, versus 15 percent of Southern Californians.

Nearly 70 percent of consumers nationwide will spend some of their holiday budget on the Internet, which represents 21 percent of their total holiday spend. This year, one-third of consumers mentioned that higher gas prices contributed to their reasons for shopping on the Internet. Other top shopping destinations this year were several "big box" destinations such as home electronics or home improvement stores. The concept was still in its infancy 20 years ago.

iPods, Xbox, and Cinderella Among "Must-Have" Gifts

Santa will be working with a long list of "must-have" gifts this season. iPods, Xbox, flat screen TVs, satellite radio and musical instruments will be popular holiday gifts, according to the survey, along with recent favorites such as vacations, spa services and gourmet foods. Popular toys included Roboraptor; dolls such as American Girl, Barbie, Bratz and Dora the Explorer; Cinderella-themed merchandise; and Thomas the Tank Engine. In keeping with the theme of giving, some respondents said that their "must-have" gifts would be charitable donations, and many said they don't feel there is such a thing as a "must-have" gift -- that people should appreciate what they have.

Gift Choices Vary

Not only have their store preferences changed over the last 20 years, but consumers said they also are buying different types of gifts. A strong 58 percent say they are giving more gift certificates and 30 percent are giving more cash. Gifts of services are also becoming more popular, with 17 percent saying they now give more of these types of presents. Clothing, however, has become less popular; 35 percent say they are giving less than they did 20 years ago.

About This Survey

The Deloitte Consumer Holiday Survey, which is designed to measure consumer expectations about the year-end holidays, has been commissioned by Deloitte & Touche USA LLP in the fall of each of the past 20 years. This year's survey polled 17,447 consumers. It was conducted on the Internet by an independent research company from October 10 through October 18. The poll has a margin of error of +/- 3 percent.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms and their respective subsidiaries and affiliates. As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of its member firms has any liability for each other's acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names "Deloitte", "Deloitte & Touche", "Deloitte Touche Tohmatsu" or other related names. Services are provided by the member firms or their subsidiaries or affiliates and not by the Deloitte Touche Tohmatsu Verein.

Deloitte & Touche USA LLP is the US member firm of Deloitte Touche Tohmatsu. In the US, services are provided by the subsidiaries of Deloitte & Touche USA LLP (Deloitte & Touche LLP, Deloitte Consulting LLP, Deloitte Financial Advisory Services LLP, Deloitte Tax LLP and their subsidiaries), and not by Deloitte & Touche USA LLP.

Source: Deloitte
Web site: http://www.deloitte.com/
LOS ANGELES, Nov. 1, 2005 /PRNewswire/ --