Despite expectations for economic improvement, consumers continue to reduce their spending on gifts, with the average number of gifts Philadelphians plan to purchase declining to 19.4 from 24.5 last year and 25.1 in 2007. Gift spending is down four percent at $538 compared with $562 in 2008. This, however, is a much higher spend than the national average where consumers across the United States plan to spend $452 on gifts this year compared with $532 in 2008.
Spending on the non-gift items, such as home and holiday furnishings, non-gift clothing, social events outside the home and entertaining at home, which traditionally account for a smaller portion of the holiday budget, is higher. As a result, consumers' total anticipated holiday spend is at $1,087, a 13 percent increase over last year, but slightly lower than the national average of a 16 percent increase in total holiday spending.
"With Philadelphians feeling more confident in the economy and key economic indicators easing from their worst levels, consumers are more likely to embrace the spirit of holiday spending this year," said Tara L. Weiner, managing partner, Greater Philadelphia Region, Deloitte LLP.
Caution still reigns when it comes to purchasing behavior, as nearly two-thirds (65 percent) of consumers plan to shop differently due to concerns about the economy. These shoppers demonstrated a focus on frugality in their intentions to buy items on sale (76 percent), buy lower-priced items (58 percent) and use more store coupons (57 percent).
Among the 52 percent of Philadelphia consumers planning to spend less, 47 percent plan to save more money, which is higher than the national average of 38 percent. Concerns about higher food and energy prices, stock market volatility, and an overall concern about the economy have shifted downward, averaging nearly a 24 percentage point drop from 2008.
Discount Stores Still Top Destination; Gift Cards Remain Top Gift
Discount stores continue to hold the top spot in the Greater Philadelphia Region as a shopping destination, confirmed by 63 percent, followed by online shopping at 49 percent, compared to 42 percent nationally. Traditional department stores and outlet stores/centers both ranked third at 32 percent, a slight increase in ranking for the outlets. This is the first year that the Internet has surpassed traditional department stores as a shopping destination.
Gift cards hold their first-place position for the sixth year in a row, with 74 percent of consumers in the Greater Philadelphia Region planning to buy them as presents, 10 percent more than the national average. While the number of gift cards they plan to purchase was down slightly (5.3 percent from 5.9 percent in 2008), consumers' planned spending per card is $31, also is slightly down from $33 last year. Consumers in the Greater Philadelphia Region planning to buy gift cards will purchase them from: non-supermarket stores (55 percent); restaurants or fast food chains (44 percent), an increase from 37 percent last year; and for services or experiences (26 percent).
Clothing as a gift category came in second place for the second consecutive year with 56 percent of consumers in Greater Philadelphia Region planning to buy clothes as gifts.
Technology-related gifts - including game consoles, computer and video games, home, personal and automotive electronics - continued to grow in popularity at 43 percent. Computer and video games lead the pack with 25 percent (up from 23 percent in 2008) of consumers planning to purchase these items, followed by home electronics up to 15 percent (from 7 percent in 2008), and game consoles at 9 percent (up from 7 percent in 2008).
How to Pay
Given the numerous ways to pay for holiday purchases, most Philadelphians (44 percent) are going to use credit cards as compared to only 29 percent of national respondents. In the Greater Philadelphia Region, 33 percent of consumers plan to pay by debit cards, which is lower than the 38 percent nationwide. Finally, only 19 percent of consumers in the Greater Philadelphia Region plan to pay with cash or checks, compared to 31 percent nationwide.
Leveraging Technology to Save Money
Unique to the Greater Philadelphia region, 57 percent of those shoppers planning to change the way they shop reported that they are likely to look for more "free shipping" offers from online retailers compared to only 45 percent nationwide. In addition, 54 percent of those Philadelphians stated that they are likely to go online more to find better prices, coupons, and deals, compared to only 42 percent nationwide.
