Ernst & Young (E&Y) predicts an increase of 6.5 percent in holiday spending this year, with consumer electronics the hottest category, according to a report in RTO online. Mobile phones that provide full internet access, thin-screen high density TVs and iPods are high on wish lists, along with NASCAR-related items, TMX Elmo and hanging earrings of all kinds, from loop to chandelier, the E&Y sixth annual holiday forecast says. A ConsumerReports.org survey of wish lists for this year found that electronics, along with toys, are on more than 50 percent of the respondents wish lists. The survey also found that electronics were the most liked gifts last year, and that socks were the least appreciated.
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Low unemployment, greater consumer confidence and drops in energy prices will drive the increase in consumer spending, the E&Y report says, and gains in the stock and bond markets could have a positive effect on upper income consumers.
Internet sales are expected to increase by 20 percent this holiday season and will peak in mid-December, the E&Y report says. Other retailing trends identified by E&Y, RTO online says, will include lean inventories, promotions, and stores and malls opening for Black Friday, the Friday after Thanksgiving, at midnight on Thursday instead of 5 A.M. Friday.
“There are some concerns that will temper spending,” the E&Y forecast said, according to MarketWatch, such as a slowing economy or a sluggish housing market. “However these concerns aren’t anticipated to have a major impact on holiday spending.”
Gift cards are typically purchased the week before Christmas and remain popular gifts for women, ConsumerReports.org says, even though 19 percent of gift-card recipients have not used one or more of the cards received. About 23.3 million Americans have unused gift cards from last year’s holidays – with a total value of $972 million, making gift cards a potential waste of money for the consumer.
The E&Y forecast says that gift cards will be especially strong this year and many retailers will include impulse gifts that can be added to the card, RTO Online reports.
Discounters like WalMart and Target and online shopping will see more customers this year, but department stores and outlet malls may see declines in their business, ConsumerReports.org says. Seventy-two percent of respondents to their survey said they planned to shop at discount stores like WalMart, and 62 percent said they would shop at department stores like Macy’s.
Consumer Reports warns shoppers to watch out for pushy salespeople who try to sell extended warranties with electronic purchases. Data from their earlier surveys have shown that the extended warranties cost more than the average repair. Younger shoppers (from 18 to 34 years old) are more vulnerable to extended warranty sales pitches.
Consumer Reports found it difficult to quantify the most liked and most disappointing gifts for 2005. One unfortunate respondent received a mashed-potato-scented candle and of course, there were the awful socks. Some respondents were disappointed that they did not get to see their family and a few wished for good health and peace on earth.