Holiday Spending to Grow a Low 3.4 Percent
FOR IMMEDIATE RELEASE
LOS ANGELES ̶ Dec. 2, 2013 ̶ Retailers are in for another slow holiday season this year, with revenue from the season (December 1 to 31) growing only 3.4 percent over 2012 totals, to a projected $68.9 billion, according to research firm IBISWorld. Slow growth in disposable incomes and sustained unemployment, compounded by the recent government shutdown, are expected to keep consumer spending tight during the holiday.
| SPENDING CATEGORY | 2009($m) | 2010($m) | 2011($m) | 2012($m) | 2013($m) | % change |
| Gifts | 45,689 | 47,651 | 49,966 | 51,685 | 53,291 | 3.1 |
| Food | 5,266 | 5,355 | 5,690 | 5,964 | 6,250 | 4.8 |
| Decorations | 5,335 | 5,357 | 5,567 | 5,801 | 5,971 | 2.9 |
| Cards & Postage | 3,136 | 3,127 | 3,203 | 3,219 | 3,428 | 6.5 |
| TOTAL | 59,426 | 61,490 | 64,426 | 66,669 | 68,940 | 3.4 |
Gifts
Gifts represent the single-largest expenditure category during the holidays, generating 77.3 percent of total revenue for the season. In 2013, IBISWorld forecasts the category to grow 3.1 percent to $53.3 billion. In an effort to reduce expenses, consumers are expected to purchase presents for a smaller network of people. Americans are returning to the heart of the holidays, spending time and money on family, friends and loved ones that matter most. The people that they do buy gifts for are likely to get more high-value gifts like electronics and jewelry. In fact, these two product categories are anticipated to grow 6.6 percent and 7.0 percent, respectively, from 2012 levels. Well-timed releases of video games, consoles, tablets and smartphones will also help drive growth for the electronics category.
Conversely, cosmetics and personal-care items and clothing are expected to record less-spectacular growth. The cosmetics and personal-care items category is anticipated to grow only 0.2 percent over 2012, while purchases in the clothing category are actually expected to decline 0.5 percent this year.
| GIFT CATEGORY | 2011($m) | 2012($m) | 2013($m) | % change |
| Electronics | 7,299 | 7,804 | 8,318 | 6.6 |
| Jewelry | 4,921 | 5,217 | 5,583 | 7.0 |
| Toys, Sporting Goods & Hobby Goods | 3,368 | 3459 | 3,723 | 7.6 |
| Clothing | 8,890 | 9,120 | 9,072 | -0.5 |
| Personal Care & Cosmetics | 5,094 | 5,218 | 5,229 | 0.2 |
| Gift cards | 6,088 | 6,352 | 6,556 | 3.2 |
| Other | 14,305 | 14,516 | 14,809 | 2.0 |
| TOTAL | 49,965 | 51,686 | 53,290 | 3.1 |
Food
Revenue generated from food and alcohol purchases is expected to grow faster than total holiday revenue this year, increasing 4.8 percent from 2012 to $6.3 billion. As mentioned, many consumers are opting for gatherings with close family and friends, particularly over food and drinks, instead of exchanging gifts with an extensive network. IBISWorld estimates that 111.7 million US households will celebrate the holiday season this December, spending 3.9 percent more on average for a celebratory dinner than they did in 2012.
Decorations and cards
Spending on holiday decorations is expected to underperform average holiday spending this year, growing only 2.9 percent from 2012 to less than $6.0 billion. Tight budgets and weak economic confidence are encouraging consumers to reuse decorations from previous years or make some themselves instead of buying new decorations.
Spending on greeting cards and postage, on the other hand, will jump a hefty 6.5 percent in 2013 to $3.2 billion. The reason for this strong growth is twofold: Some consumers will send cards to friends and family in an effort to get back to the roots of the holiday season, while others will send cards in lieu of gifts to save money.
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit www.ibisworld.com or call 1-800-330-3772.
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