Holiday spending expected to rise; Az retailers optimistic
WASHINGTON - Holiday spending is expected to increase by 3.5 to 4 percent this year, as a rising number of consumers plan to spend more and fewer expect to pull back, according to a new national survey.
The survey by the Consumer Federation of America and the Credit Union National Association, released in advance of the biggest shopping day of the year, said consumer confidence is stronger than it has been in some years.
“People, apparently, are more prepared to spend because they see a somewhat brighter economic future,” said Stephen Brobeck, executive director of the consumer federation.
“Since 2007, the percentage of those planning to increase their holiday spending has never been higher, and the percentage of those planning to reduce their spending has never been lower,” Brobeck said Wednesday at the release of the groups’ 13th annual shopping outlook.
Bill Hampel, chief economist at the credit union association, said the outlook is stronger than it has been in the last four years.
“It still doesn’t suggest a booming holiday season, but a continued improvement from the last two years,” Hampel said.
He said spending is expected to be “strongest in the South and weakest in the West.”
But economists and retailers in Arizona said they are looking forward to strong holiday sales, with increases at least as great as the national average, if not more.
“My prediction would be more in the 5 percent range,” said Dennis Hoffman, director of the L. William Seidman Research Institute at Arizona State University’s W.P. Carey School of Business.
Given the national numbers, Hoffman said his projections might be a little optimistic, but that the evidence he has seen so far suggests a strong season.
“I have been seeing retail growth in the 4 to 5 to 6 percent range for a reasonable amount of time,” said Hoffman, who is tracking tax receipts daily to monitor consumer spending.
Optimistic or not, Hoffman’s prediction was echoed Wednesday by the executive director of the Arizona Retailers Association.
“There may even be a 4 to 5 percent increase in consumer spending this year,” said Michelle Ahlmer, the association director.
She said the holiday season is always good for retail, but the increased spending this year likely reflects an economy that is rebounding.
And Ahlmer said Arizona has another asset that other Western states might not enjoy.
“The one advantage here – we have absolutely wonderful weather,” she said. “We get a lot of visitors during the holiday season and our sales are always higher.”
Hoffman agreed that the “left (coast) being weak doesn’t mean Arizona is weak.” He conceded that the sales may have weakened for the fall because of uncertainty about the elections and the impending fiscal cliff, but it is not a sign of another recession.
“Five percent might be overly optimistic, but it may not be as low as 4 percent,” Hoffman said.
At Changing Hands Bookstore in Tempe, owner Gayle Shanks was just as optimistic.
“I expect consumers to be spending more money this holiday,” Shanks said. “Cash registers will be ringing in our store.”
Shanks, who opened her bookstore in 1974, looks to each holiday season with excitement, both for the increase in sales and the chance to see winter customers who “return year after year.”
“Even in down years, we did better during the holiday season,” Shanks said Wednesday.
The report, “Holiday Spending 2012,” is based on a Nov. 9-13 telephone survey of 1,012 people who were asked whether they intended to spend more, about the same, or less than last year. It also asked for their concern over debt, credit card payments and other questions.
Nationally, 12 percent said they expected to spend more, up from 8 percent last year, while 38 percent said they would spend less, down from 41 percent a year ago.