Holiday spending up in the Princetons
By: George Spohr
Consumers in Princeton and throughout the Philadelphia area plan on spending more money this year than last, according to a recent survey.
Deloitte & Touche USA, in its 20th annual survey of the Philadelphia region, which includes Mercer County, found that shoppers here plan to spend an average of $638 on gifts this holiday season, up from $522 a year ago and above the national average of $604.
But before area retailers rejoice, they should take note: Area consumers expect to spend a quarter of that $638 online.
"Consumer spending levels have increased steadily over the past 12 months, which should point to a positive holiday season for area retailers this year," said Tara Weiner, spokeswoman for Deloitte & Touche’s Philadelphia office. "This is not surprising given the economic fundamentals in place and the revitalization activity that is driving Philadelphia and the surrounding area."
These survey findings also support Deloitte’s expectations that national non-auto holiday sales will increase 6 to 6.5 percent during the November-to-January period, less than last year’s 8.6 percent increase, but still above the last decade’s average growth rate.
Gift cards remain the top gift purchase in the area this year, with 69 percent of respondents indicating that they will purchase between four and five cards, making them even more popular than last year.
"The continued growth of gift cards places added importance on post-holiday retail sales, as retailers are unable to report the sale until the consumer redeems the card," Ms. Weiner said. "Look for retailers to offer innovative promotional campaigns for gift card redemption this year, as shoppers typically spend more than the face value of the card."
Some 44 percent said they had unredeemed cards from last year and some reported holding cards that were five or more years old.
Area consumers said it was the Internet where they plan on spending most of their money, the first time respondents chose the online marketplace to in-person stores. Last year, discount department stores topped the list.
While 79 percent of respondents cited convenience and 69 percent cited saving time as primary factors for shopping on the Internet, 56 percent said they will shop there because it is easier than store shopping and 45 percent because they can find unique products not in stores.
"Higher gas prices and increased time pressures are driving consumers to seek more convenience in their shopping experience; this supports the increasing preference for Internet shopping," Ms. Weiner said. "Consumers are looking for the basics: good deals, in-stock merchandise, easy return policies, extra sales help and registers, and extended shopping hours. In addition, they indicated that Internet e-mails notifying them of sales and offers, store-wide discounts, gifts with purchase, and availability of gift cards were significant factors impacting their decision of where to shop.
"Retailers who manage their inventory with the right products, in-stock at the right price, and maximize their customer service will likely capture the greatest share of the consumer’s wallet and be able to convert shoppers into buyers," she said.
The move to online shopping underscores a marked shift in consumers’ mindsets, she added. When asked about their favorite shopping venues from 20 years ago, Philadelphia area consumers said they had two strong favorites: 68 percent did most of their shopping at either traditional department stores or discount department stores. Today, consumers have no clear favorite: In this year’s survey, discount department stores and traditional department stores were a close second and third, respectively, to the Internet as the channel where area consumers will spend the most money.
Area respondents showed a greater preference for catalogs and small clothing stores than consumers nationally.
The survey also found that:
This holiday season, Americans will put their hard-earned money to work by giving to charitable causes. Charitable donations ranked fourth among the spending categories, exceeding planned spending for holiday entertaining at home, non-gift clothing and holiday furnishings. Area consumers expect to spend $797 on home improvements this holiday season, 27 percent over the national average.
Not only have their store preferences changed, but area consumers also are buying different types of gifts. In this area, 44 percent of consumers plan to buy food or liquor as a gift, compared to 36 percent of consumers nationwide. Also, cash and checks are increasing in popularity, with 36 percent of respondents giving money, compared with 29 percent nationally.
Some 31 percent plan to purchase gift cards for services and experiences, which are more popular in the Philadelphia area than nationally.
Respondents are not rushing to start their holiday gift shopping. A full 25 percent of respondents didn’t expect to start their holiday shopping before Black Friday. In fact, more than half plan to spend some of their holiday budget after Dec. 25.
As consumers get older, they become less thrifty than in the past. Consumers aged 55 years and older plan to spend 6 percent more on gifts than they did last year and 22 percent more than the average consumer, reflecting, in part, the affluence of the baby-boomer generation, the survey said.
The survey included 538 respondents from the region and 17,447 nationwide. It was conducted in mid-October and has a margin of error of 3 percent.

