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Another Holiday Projection

Holiday sales should be up 3%-4% this year acording to a study released this weekend by the International Mass Retail Association. The ‘1997 IMRA Holiday Shopping Study’ indicates 58% of consumers expect to spend the same as last year or about $813 per family. Three-fourths of consumers say they will make Christmas purchases at discount department stores. The VISA-sponsored IMRA study says this year’s hot toy products will include the Interactive Barney, Sleep and Snore Ernie, Holiday Barbie, Hot Wheels and Star Wars collectibles.

Retailers can expect a 3-4% increase in holiday sales this year, as more than half of all consumers surveyed (58%) said that they expect to spend about the same amount of money as they did last year on holiday purchases. Twelve percent (12%) said they expected to spend more than they did last year, while slightly more than one-quarter (26%) anticipated spending less. As in previous years, the majority of consumers (75%) plan to head off to the discount department stores to purchase their holiday gifts. An anticipated $200 billion is expected to be spent in the six weeks prior to December 25, 1997. These are some of the major findings cited in the fourth annual International Mass Retail Association (IMRA) Gallup survey, sponsored by Visa USA.

According to the “1997 IMRA Holiday Shopping Study,” the amount consumers plan to spend on gifts on average this year is $813 per family, compared to last year’s average of $806. The product categories most frequently identified by consumers for their increased spending are casual clothes with toy buying remaining at the same rate as last year. Continuing a trend from last year, large household items, computer hardware, home furnishings, hardware and small household/kitchen appliances were the product areas where respondents reported the biggest anticipated decline in spending this year.

“It is clear that consumers are in search of the highest quality products at the best prices for their holiday purchases, as evidenced by the fact that 75% of Americans shop at the discount department store,” says Robert Verdisco, IMRA president. “For 1997, American consumers will spend slightly more than $300 billion during the fourth quarter, and the majority of that money will be spent at the discount department stores and category dominant retailers.”

Three-fourths (75%) of all consumers surveyed expect to make their Christmas purchases at the discount department stores, continuing a steady trend since 1994. Only 49% of shoppers plan to shop at department stores, reporting a decrease of 6% from 1996, and only 23% of the respondents plan to make purchases from non-store retailers, a decrease of 2% from last year. On the other hand, category dominate stores will show an expected increase of 3% over last year as 43% of consumers plan to shop there.

In a poll of its retail members, IMRA lists some of the hot toy products to be purchased this year as Interactive Barney, Sleep and Snore Ernie, Holiday Barbie, Hot Wheels, Star Wars Collectibles and Sesame Street products, to name a few. In the apparel categories, consumers are expected to purchase blazers, jerseys, blouses, sweaters and polar fleece jackets. Jewelry, power tools, bath sets, ice cream makers, animal slippers, and fitness equipment also expect to be hot product categories.

More than a third of all respondents (35%) plan to complete their holiday shopping in the first two weeks of December, while 23% stated that they shop for Christmas throughout the season. Fourteen percent of shoppers plan to complete their holiday shopping in the last two weeks of December, while 11% will complete their shopping during the last two weeks of November.

Respondents who expect to spend less compared to 1996 were those consumers with household incomes of more than $50,000 (-3%) and 18-34 year olds (-4%). Among those consumers who expect to spend more compared to last year were individuals 55 years or older (+3).

The IMRA/Gallup survey was conducted during October 1997 and is based on a random telephone poll of 1,009 adult consumers nationwide. For a complete copy of the IMRA 1997 Holiday Shopping Study, please contact Robin Lanier at the IMRA, telephone (703) 841-2300.

         Where Respondents Plan to Shop For Non-food Gift Items
                            During Holiday Season


Type of store                                 Year
                              1994    1995    1996    1997
Discount department stores      76%     79%     76%     75%
Department stores               57%     52%     55%     49%
Specialty stores                44%     40%     43%     46%
Category dominant stores        34%     38%     43%     43%
Non-store retailers             25%     23%     25%     23%

— As in previous years, discount department stores are the
number one choice of consumers surveyed with 75% planning to shop
there this holiday season.

— When compared to 1996, there was an decrease in expected
visitation this year, with department stores decreasing 6%, and
non-store retailers decreasing 2%. However, category dominant stores
showed an increase in expected visitation this year, increasing 3%
from 1996.

                Selected Retail Sales - December 1996

                               Overall Sales Comp Sales Overall
                                     in       Change    Change
Company                           billions

Wal-Mart (5 weeks to Jan 3)         $14.13       +6.8    +12%
Kmart (5 weeks to Jan 3)              5.39      +10.4     +10
Sears Roebuck                         4.28       +9.5     +15
Dayton Hudson                         4.24       -3.0      +4
Federated Department Stores           2.74          0      -5
J.C. Penney (4 weeks to Dec. 25)      2.48       +6.2      +8
May Department Stores                 2.31       +2.7      +9
Limited                               1.87       -1.0      +7
Best Buy                               1.3        -13      -5
Woolworth                             1.20       +0.8       0
Circuit City                          1.17        -13      +4
Gap                                   .896         +2     +14
TJX                                   .892       +9.0      +9
Lowe's                                .808       +4.0     +18
Talbot's (11/3-12/2)                  .155       -1.6      +8
Bed, Bath & Beyond (11/24 - 12/29)    .117       +7.2     +35
Ann Taylor                            .102       +8.8     +12

Source: Goldman Sachs, based on company reports (printed in the New
York Times, 1/10/97) Results for the five weeks ended Jan. 4
compared with the similar fiscal period in 1995.
The IMRA represents the largest and fastest growing segment of the retail industry, which includes discount department stores, home centers, category dominant or specialty discounters, catalog showrooms, and warehouse clubs. IMRA members operate more than 61,000 stores in the US and abroad, employ one in every ten Americans, and represent more than 60 percent of all American department store sales for a total of over $346 billion annually.

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