Deloitte: Consumers Bullish on Economy; 38% No to Credit Cards; 66% Plan to Buy Gift Cards

While the government has lowered its forecast of the US economic growth, the American consumers are bullish about the economy, according to a survey of retail spending and trends, commissioned by Deloitte & Touche. 
  • 92% of consumers say a recent change in the market value of their home will have no impact on holiday spending
  • 82% consumers say they feel secure about their jobs
  • 68% expect the economy to improve or stay the same next year 

“Consumers have withstood challenges this year from energy costs, slow growth in jobs and softness in the housing market, and they continue to be bullish about the economy and their own financial well-being,” said Pat Conroy, vice chairman and national managing principal of Deloitte’s Consumer Business practice. 

A Conservative Approach to Debt:

  • 63% of total holiday purchases will be paid for using cash, checks, or debit cards
  • 38% of individual consumers surveyed say they will not use credit cards at all for holiday shopping.

Gift Cards Still Rated High; Mixed Bag for Retailers

  • 66% of consumers planning to buy gift cards, roughly the same as last year. 
  • Consumers intend to buy an average of 4.6 cards, an increase from the 3.9 they bought last year.  
  • 35% would rather get a gift card than merchandise; however, 
  • 22% say they don’t like to give gift cards because they’re too impersonal.  

However, gift cards may present a mixed bag for retailers. “Our survey showed that, as a result of buying gift cards last year, 50% of consumers spent less time shopping during the holidays and 41% bought fewer spontaneous, spur-of-the-moment items,” said Conroy. 

Online Shopping Continues to Grow: 

  • 70% of consumers surveyed expecting to do part of their holiday spending online. 
  • 57% of consumers with household incomes under $50,000 plan to do some of their holiday shopping online. 

A previous survey conducted by Deloitte found a 15% net acquisition rate for online shopping versus a 2% net acquisition rate for stores.

Discount and Traditional Department Stores Gain

  • 74% will shop at a discount department store this season (vs. 57% in 2005) and 
  • 48% will shop at a traditional department store (vs. 42% in 2005).  

While traditional department stores continue to be favored by upper income households and older age groups, interest from younger groups is also increasing, with nearly 47% of Gen Y shoppers (18-29 year olds) planning to shop in them (vs. 41% in 2005).

About the Survey
The survey was commissioned by Deloitte & Touche USA LLP and conducted online by an independent research company between September 25 and October 11, 2006.  The survey polled a sample of 13,399 adult consumers.  The margin of error for the entire sample is plus or minus 2 percentage points.

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