U.S. Shoppers Plan to Spend 3.2% Less This Holiday, NRF Says

By Cotten Timberlake

Oct. 20 (Bloomberg) -- U.S. consumers plan to spend 3.2 percent less this holiday season from a year ago as they shop for deals at discounters and buy fewer gifts for non-family members, according to a survey.

Shoppers plan to spend an average $682.74, compared with $705.01 last year, according to the National Retail Federation, a Washington-based trade group. Last year’s decline was 7.6 percent, compared with the 9 percent increase shoppers had projected going into that shopping season.

This will be the holiday season of “the serious bargain- hunter,” the trade group said in a statement today. The NRF reiterated its own prediction for a 1 percent decline in holiday sales, a forecast that is based on unemployment rates and retail sales.

Forty-three percent of respondents said discounts will be the most important factor in deciding where to shop, compared with 40 percent a year earlier. Seventy percent said they would shop at discounters, similar to the previous year.

Spending on family members will drop 2 percent, while for friends and co-workers, it will decline 17 percent and 15 percent, respectively, according to the survey.

U.S. holiday sales may decrease for the second year as consumers stick to budgets and retailers cut prices to encourage spending, the NRF said earlier this month.

Sales for the last two months of the year will probably fall 1 percent to $437.6 billion from the same period in 2008, the NRF forecast Oct. 6. That’s not as steep as last year’s decline of 3.4 percent, the first drop since the NRF started tracking holiday sales in 1995. The highest U.S. unemployment in 26 years, stagnant wage growth and wavering consumer confidence will reduce spending, the NRF said.

Today’s findings are based on a national survey of 8,431 adults contacted from Sept. 30 to Oct. 7. The survey has a margin of error of plus or minus 1 percent. It was conducted for the NRF by Worthington, Ohio-based BIGresearch LLC.

To contact the reporter on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net