Holiday Spending 2010 vs. 2009

Economic data flows into the market nearly every day, but there is something about the holiday season that brings a bit more focus to the analysis. Perhaps it is because it dovetails with the end of the year and that is a natural time to step back and assess. Alternatively, it could be a function of the fact that despite the myriad beliefs and practices in North America around this time of year, people seem to unite around a common love of shopping and gift exchange. (For additional reading, also check out Be A Holiday Saver, Not A Scrooge)

Now might be a good time, then, to consider the holiday seasons of 2010 and 2009, and what that might say about the broader economy. 

Retail Sales Are Getting Better … Slowly … Maybe 
According to the National Retail Federation, this holiday should be a little bit better than last year. The organization expects its members to see a 2.3% rise in spending over the holiday season. Interestingly, a similar survey suggests a traffic increase of about 3% over Black Friday. Now, there is certainly no reason to make too much of that discrepancy (they cover different time periods, after all), but it would be an interesting phenomenon all the same if there are more shoppers in the store, but still an overall pullback in how much people spending. 

What is even more interesting, though, is the difference in other polls. A recent Gallup poll indicated that consumers were predicting that they would spend about 12% more than they did last year - or, rather, their predictions in November 2010 regarding what they think they will spend on Christmas is 12% higher than the predictions made in November 2009. Likewise, although most people expected to spend the same as the prior year, the number of people who said they would spend less was nearly three times higher than the number who said they would spend more. On the flip side, yet another survey from the NRF suggested that average spending may climb 1% this year - a level that would still be a bit below 2008 and well below 2007. (For related reading, see Using Consumer Spending As A Market Indicator.)


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