Shoppers gear up for holiday season
By LaTrina White
CNN
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SPECIAL REPORT
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ATLANTA, Georgia (CNN) -- Shoppers may be readying their wallets as the 2003 holiday retail season kicks off, but they're not ready to empty them.
The average consumer plans to spend about $672 this year on holiday purchases, according to the National Retail Federation (NRF). Last year, consumers spent an average of $649.
"From our consumer survey, we found that consumers plan to spend a little more this year than last," said Ellen Tolley, a spokeswoman for the NRF. "That's no surprise because consumers have a little more money in their pockets than they did a year ago."
Atlanta architect Ian de Lima, 35, plans to spend between $400 and $500 this year.
"I will probably spend more this year than last year," said de Lima. "I feel the economy is a lot stronger than last year and can only get better."
Low interest rates, tax breaks and a relatively bullish stock market are making Americans more comfortable about spending, said Rosalind Wells, a chief economist for NRF.
"Certainly the president's tax credit and child tax credit checks helped to boost some consumers' disposable income," Tolley said. "Also, many consumers are refinancing their homes ... which leads to a greater amount of disposable income, and the rising stock market is good news for investment-oriented consumers."
One expert said many spenders will be equally prudent about not draining their pockets.
"Just because they're feeling better, they're not going to go out and start spending like drunken sailors," said Phil Rist, vice president of the BIGresearch, the group that conducted the holiday shopping survey for NRF. "It's cautious optimism."
Deal seekers
In fact, the NRF study projects that holiday retail sales will grow by 5.7 percent over last year, bringing total holiday spending to $217.4 billion. Holiday sales grew 2.2 percent in 2002.
This means that optimistic retailers are expecting to ring up their best increase in holiday sales in four years, according to NRF.
The holiday shopping season -- November and December -- accounts for about 25 percent in yearly retail sales.
Architect Ian de Lima and his wife of 6 months, Marcia, during an interview at Lenox Mall in Atlanta. The newly weds say they will spend about $400 to $ 500.
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"I think that the retailers recognize that it's going to be a pretty good season," said Malachy Kavanagh, vice president of communication for the International Council of Shopping Centers (ICSC).
"What they really hope is that the weather cooperates, that the consumer gets out early and shops, and they [retailers] don't have to wait ... and mark down some of their goods to move sales," said Kavanagh.
But de Lima said he's already noticed attractive bargains.
"There seem to be more deals and incentives this season, more competition in pricing," said de Lima.
Many bargain-hunting consumers, who will be on the prowl for deep discounts, share that sentiment.
"The number-one aspect of the shopping season this year will be sales and promotions," NRF's Tolley explained. "If retailers can deliver good sales and promotions, consumers will buy."
Online and on guard
Not all shoppers are battling mall lines to find deals. Along with the traditional incentives of reduced prices, online vendors are offering free shipping and even discounts on expedited shipments to entice last-minute shoppers, according to retail analyst Patti Freeman of Jupiter Research, a leading online marketing research group.
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Atlantan Suzanne Sneed, 33, plans to spend about $1200 this holiday season.
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According to Jupiter Research, shoppers will spend $16.8 million online this season, a 21 percent jump over last year. Most of the expected growth comes from new users. Online buyers are expected to spend an average of $265 per person.
"Online shopping is probably going to be the quickest growing retail sector this year," said economist Steve Spiwak of Retail Forward, a trade organization. "I think it's partly convenience, I think it is partly price."
Between July and September of this year, the U.S. economy grew at its fastest pace in nearly 20 years, the Commerce Department reported. The gross domestic product leaped a 7.2 percent annual rate. In the previous quarter, it had grown at a 3.3 percent annual rate.
Whether online or in the mall, not all shoppers feel compelled to spend more because of improving economic conditions.
During a shopping trip in an Atlanta mall, Suzanne Sneed, 33, said she isn't budgeting more for holiday shopping than she did last year -- about $1,200.
"I don't think my job is anymore stable this year than last year. The IT [information technology] field is still hurting," said Sneed.
