PRINCETON, NJ -- Americans' forecast for what they will spend on Christmas gifts this season is as budget conscious as it was a month ago. The current $639 in anticipated spending, based on Dec. 4-7 Gallup polling, is statistically similar to the $616 in mid-November (the lowest in Gallup's records), but down from $833 last December.
This decline is the result of far fewer Americans running up holiday bills of at least $1,000. Only 22% of national adults in the new survey said they would spend $1,000 or more this year on gifts, down from 33% in December 2007, and the lowest in any year since 1994. As spending contracts, the percentages of Americans falling into the lower income categories have increased, particularly the $100 to $249 category.
Everyone's Cutting Back
Intended Christmas spending is down compared with December 2007 among all income categories, although the drop has been particularly steep among wealthy shoppers (those in households making $75,000 or more per year) and middle-income consumers (in households making $30,000 to $74,999 per year).
The December 2008 average estimated spending of $954 among adults in upper-income households is the first time since at least 2001 that spending among this group has averaged below $1,100. The average $625 estimate among middle-income adults marks the first time in the same period that this group has fallen below $750.
It is interesting to note that on a long-term basis, since 2001, spending has dropped most sharply among lower-income households, falling 38% from $531 to $331. By contrast, spending has fallen by 26% among those in middle-income households (from $850 to $625) and by only 20% (from $1,190 to $950) among higher-income earners.
Not only are Americans projecting a lower actual dollar amount for their total holiday gift giving than they did in 2007, they also say they will spend less.
The new survey finds nearly half of Americans -- 45% -- saying they will spend less on gifts this Christmas than what they spent last year. This is unchanged from November, but extraordinarily conservative compared to previous years.
In almost every year from 1990 through 2007, at least half of Americans said their Christmas spending would be about the same as the prior year, and not much more than one-quarter said they would spend less. The only exception was 1991 (the first Christmas season after the 1990-1991 recession), when only 43% of Americans said they would spend the same amount on gifts, while 33% said they would spend less.
Gallup's 2008 Christmas spending data suggest Americans are highly reluctant to part with their hard-earned dollars right now, and, short of possibly capitalizing on deep holiday discounts and promotions, they show relatively little enthusiasm for Christmas shopping.
In a good year, the retail industry hopes to beat the 10-year average of 4.4% growth in holiday sales. Last year it saw a below-average 3.0% rise in year-over-year sales for the months of November and December, making 2007 one of the worst holiday retail seasons in recent memory. But given the sharp decline in Americans' projected spending, this year's spending figures could easily wind up in negative territory, with November/December retail sales totaling less than they did a year ago.
Results are based on telephone interviews with 1,009 national adults, aged 18 and older, conducted Dec. 4-7, 2008. For results based on the total sample of national adults, one can say with 95% confidence that the maximum margin of sampling error is ±3 percentage points.
Interviews are conducted with respondents on land-line telephones (for respondents with a land-line telephone) and cellular phones (for respondents who are cell-phone only).
In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.