The [image-nocss] increase in planned c-store spending is likely related to a rise in prepaid gasoline cards as gifts. Other stores that might not fare as well are department and electronic stores, with almost one-third (28%) of consumers expecting to spend less there this year.
"Retailers answering consumers' call for value will capture shoppers' attention this holiday season," said Todd Hale, senior vice president of Consumer & Shopper Insights for Nielsen, New York and Schaumburg, Ill. "Whether it's lower prices, instant rebates or free shipping offers, value messages will speak to bargain-seeking consumers in today's tough economic climate," he added.
Nielsen's survey of 21,000 U.S. households shows that economic concerns are also putting a damper on holiday spending among high-income ($100,000 plus) consumers, with nearly one-third (32%) of affluent shoppers planning on spending less this holiday season. Only 5% expect to spend more.
Entertaining at home is also likely to suffer, with almost one-third (29%) of the consumers surveyed who do so planning to spend less this holiday season-including 26% of high income consumers. For those entertaining away-from-home, 33% expect to spend less, including 31% of affluent consumers.
"The trend to entertain at home continues as consumers grapple with high gas and food prices, and it bodes well for manufacturers and retailers promoting at-home options" said Hale. "At the same time, it points to a challenging holiday season for restaurants, hotels and banquet facilities catering to the holiday crowd."
Overall, Nielsen forecasts 4.7% growth in dollar sales or $98 billion across grocery stores, drug stores, mass merchandisers and c-stores for the holiday shopping season. The growth forecast, slightly higher than last year's 4.5% gain, is in large part due to higher commodity prices. Nielsen projects unit sales, however, to be flat or down 0.8% versus a year ago.
Nielsen offers the following suggestions to help retailers and manufacturers survive this holiday season:
Carefully manage inventory like never before to avoid extra inventory come January. Reach out to your best customers in stores, through direct mail and/or via advertisements and make them feel special about your brands and your stores by providing special coupons or sale prices. Recognize that necessities, not the nice-to-haves, will drive strong sales this holiday season. Toiletries, baby care products, food items and gift cards for groceries, gasoline, telephone and car maintenance are expected to succeed. This holiday season, retailers are likely to see a big upside in consumer packaged goods (CPG) sales. Leverage these CPG products to drive basic gifts and stocking stuffers, such as toiletries, pet care, household cleaners and special holiday packs for food and beverage items.
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