Justine Griffin/Sarasota Herald-Tribune—Economic uncertainty surrounding the government shutdown is pushing American consumes to take a conservative approach to spending this holiday season.
The National Retail Federation predicts that the average shopper will spend $737.95 on gifts, holiday-themed decor, greeting cards and more this year, which is two percent less than the $752.24 average shoppers spent in 2012. The NRF expects holiday sales to increase at a modest 3.9 percent rate in 2013, bringing overall sales to $602.1 billion.
“Though the foundation for solid holiday season growth exists, Americans are questioning the stability of our economy, our government and their own finances,” said Matthew Shay, NRF president and CEO. “We expect consumers to set a modest budget for gifts and other holiday related purchases as they wait and see what will become of the U.S. economy in the coming months.
“Retailers have urged Congress and the Administration to seek a long-term solution for funding the government and extending the debt ceiling instead of kicking the can down the road once again. A band-aid approach is not the answer. Americans deserve to feel good about spending their hard-earned money on gifts for others, and this holiday season it’s evident some could second-guess their spending,” continued Shay.
NRF data shows that the government shutdown in Washington will affect holiday spending plans. About 29 percent of shoppers aid the political situation will very likely affect their spending plans. About a third of consumers between the ages of 55 and 64 said it affects ther budget. More than half of those surveyed said the overall state of the economy this year affects how much money they will shovel out on gifts . Nearly 80 percent of shoppers plan to spend less overall and are tightening budgets.
“Retail sales have been mixed since the summer. Back to school was disappointing and Halloween is likely to fall flat, too,” said Jeff Green, retail analyst with Jeff Green Partners. “That doesn’t bode well for the holiday season.”