BIGresearch, whose consulting arm conducted a survey of 9,000 shoppers at 11 chains said consumers who splurged last year will focus their spending on more practical items. Shoppers at stores from Best Buy Co. (NYSE:BBY) to Gap Inc. (NYSE:GPS) and Toys “R” Us Inc. all said in a recent poll that they’ll spend less this holiday season than last year. But customers plan to buy more at only one chain: Costco Wholesale Corp. (NASDAQ:COST).
Apparel is expected to be purchased by 70 percent of consumers, and gift cards by 92 percent. People who have avoided buying clothing and shoes for themselves will be willing to pay full price because there are few other exciting products they plan to splurge on. Sadly, only half of shoppers plan to buy electronics, a 10 percentage-point decline from last year. The lack of interesting products extends to toys, where Let’s Rock Elmo, may be among the few hits this season.
Thirty-six percent of executives in a survey by CIT Group and Forbes Insights saying sales will be about the same. Retailers expect slow growth this holiday season, with only 38 percent predicting a slight improvement. However, Costco (NASDAQ:COST) is “confident” about the holiday based on recent sales numbers and expects good sales of apparel, jewelry and home decor, said Bob Nelson, vice president of financial planning, while declining to give a specific forecast.
“The consumer today is looking for the best deal on practical items,” Nelson said. “So we’re benefiting from that mindset,” according to Bloomberg.