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Key Takeaways from the Holiday Consumer Spending Survey

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Nov. 26 2015, Published 3:06 p.m. ET

Holiday spending survey

According to the National Retail Federation’s (or NRF) Holiday Consumer Spending Survey conducted by Prosper Insights & Analytics, consumers plan to spend $805 on average this holiday season. That’s slightly up from $802 last year. This figure includes expenditure on gifts, decor, and food, among other items.

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What are consumers planning to spend on?

Consumer spending on gifts is expected to reach an all-time survey record at $462.95, up from $458.75 in 2014. Consumer spending on non-gift items is expected to rise to $131.59 on average this holiday season, up from $126.37 last year, implying that consumers are planning to splurge more on themselves. On average, consumers are also expected to spend $107.80 on food and $53.02 on decorations.

Shopping attractors

Greater discounts, an omni-channel sales approach, and delivery options that include free shipping, store pickup, and ship-to-store are some of the most popular options when it comes to attracting holiday shoppers.

Several larger retailers such as Wal-Mart (WMT), Kroger (KR), and Target (TGT) and online retailers such as Amazon (AMZN) offer some or all of these options.

Some retailers such as Target have already announced price matching and free shipping in a bid to capture a larger share of the holiday shopping pie.

While competitor Walmart (WMT) isn’t offering free shipping on orders below $50, its pricing policies, omni-channel capabilities, and ability to leverage economies of scale are advantages for the retailer. We’ll analyze Walmart’s promotional strategies in greater detail in Part Five of this series.

Consumer discretionary (XLY) and consumer staples (XLP) stocks make up 22.6% of the holdings of the SPDR S&P 500 ETF (SPY). Walmart and Target together constitute 0.77% of SPY. Wal-Mart also makes up 5.4% of the holdings of the Consumer Staples Select Sector SPDR ETF (XLP).

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