Consumers To Cut Back On Holiday Spending, But Not As Much As In Recession Years

Some shoppers may be loosening their financial belts a bit this holiday season, but a new Consumer Reports Holiday Shopping Poll shows economic turbulence continues to motivate many to insist on getting a bigger bang for their buck. 

About 30 percent of consumers plan to spend less this holiday season, according to the poll - compared with 42 percent in 2008.

"Consumers are optimistic, but they don't necessarily believe that happy days are here again," said Tod Marks, Consumer Reports senior editor and resident shopping expert.  "Credit is tight, unemployment remains high, the value of their homes has dropped and many Americans are facing the prospect of higher taxes of all levels." 

Thus, Marks says, while it's a bit surprising that some plan to spend somewhat more than last year, "the fact is they're insisting on value, value, value." 

In a previous CR poll conducted at the conclusion of the last holiday shopping season, consumers estimated they spent on average $811 -- 16 percent more than they had planned. 

Turning to cash

The majority of those recently surveyed plan to use cash as often and about four in ten will cut back on credit and debit card spending.  In 2009, Americans who paid with credit cards charged more than they anticipated- $180 more on average.

Another problem with using credit cards is that consumers tend to carry debt for a long time.  The latest Consumer Reports Holiday Shopping Poll revealed some 13.6 million Americans remain saddled with last years' leftover holiday debt.

Additional findings from Consumer Reports first Holiday Shopping Poll of 2010 include:

• Nearly a third (31 percent) of adults reported that they plan to cutback on gifts for themselves. Overall, they expect to spend more on charitable giving and gifts for others.
  
• Most people haven't begun shopping. As of mid-October, only about a quarter (28 percent) had started.  Twenty percent do not expect to finish until after December 23rd.

Budgets on the decline

• Nearly half (47 percent) of consumers are planning to set a budget for their holiday purchases.  That's down 12 percentage points from the height of the recession in 2008. 
• Making a budget and sticking to it are two different things.  Of the 36 percent of consumers who made a budget last year, 39 percent reported that they exceeded it; five percent said they went way over budget.

Happy holidays

Holiday optimism continues to grow.  Forty percent of adults expect their holiday season to be happier than last year.  Households with kids under 12 (53 percent) and younger adults aged 18-34 (58 percent) are particularly optimistic about the upcoming holiday season.

Poll methodology

The Consumer Reports National Research Center conducted two telephone surveys of a nationally representative probability sample of telephone households.  1,023 interviews were completed among adults aged 18+ between January 7-10, 2010 for the post 2009 holiday data.