The 2012 Consumer Federation of America (CFA)/Credit Union National Association (CUNA) annual holiday spending survey points to a marked increase in consumer spending, signaling possible good news surrounding the economy.
CUNA Chief Economist Bill Hampel reported that the percentage of consumers who plan to spend more this year rose from 8% in 2011 to 12% this year. When polled about overall holiday spending intentions, only 38% of surveyed consumers said they would curtail spending versus the 41% who tightened their belt last year.
Hampel is estimating that holiday spending could increase anywhere from 3.5% to 4% this year. “This represents the fourth year of gradual improvement in holiday spending plans since a sharp decline in such plans in 2008," he said in a press release.
Other important survey aspects include:
Although the news is positive for retailers, other surveys show that consumers continue to be cautious when it comes to holiday expenses.
Georgia Credit Union Affiliates conducted its own survey, finding that only 3.3% of the 7,000 members it polled planned to spend more money on holiday gifts this year.
Grace Lollar, president of Richmond Community Federal Credit Union ($20.1 million Gracewood, GA) told The Augusta Chronicle that members need a little help around the holidays to pay for gifts. “Wages have not risen for most of our membership, but the cost of living has gone up,” she said. “Most of our members rely heavily on holiday loans to pay for their purchases.” Richmond Community FCU is currently offering a 10 month $1,000 holiday loan at 10% APR. Find a credit union near you for information on holiday loans.
Other findings in the Georgia Credit Union Affiliate survey have consumers split about spending habits with 48.2% planning to spend about the same amount as they did last year, whereas 48.5% plan to spend less. Additionally, 57.5% report that they will spend $500 or less this holiday season.
In a Tucson Sentinel article, Hampel says that the outlook is still positive with regard to CUNA’s survey. “It still doesn’t suggest a booming holiday season, but a continued improvement from the last two years,” he said. He predicted that spending would be strongest in the South and less impressive out West.
A September 2012 study by Litle & Co. predicted that more consumers will be paying with cash (or by debit) rather than charging their holiday purchases. The study polled 500 consumers with 304 being smartphone owners.
More than half of the participants (53%) said that they will pay using cash or their debit card this season (37% preferred debit and 16% will use cash). However for purchases over $100, credit appeared to be the favored choice.
Interestingly, although many study participants were smartphone owners, 71% had never shopped using a merchant’s mobile swipe service (such as Square).
Ben Saren, VP/Marketing at Litle& Co. wrote in a press release, “The survey found that while 60% of respondents owned a tablet or smartphone, only one in four have actually shopped via their mobile devices. Of those who do, the mobile sweet spot for purchases is $20-$100. But consumers surveyed remain unimpressed with mobile wallets and, instead are torn between using credit and debit/cash this holiday season.”By Gina Ragusa