SAGE Advice: 2007 Holiday Spending Watch -- Buckle up, St. Nick, It's Going to be a Bumpy Ride

By: Leo Shapiro, Steve Yahn, and Erik Shapiro Fifty per cent of U.S consumers report in October 2007 that they intend to spend less for Christmas this year than last. This is the highest percent of consumers planning to restrain Christmas spending we have seen in our Leo J. Shapiro and Associates national survey in the past two years.

Only two in ten (19 percent) consumers plan to spend more than last year.

Champion stocking stuffers and those planning to spend the same for Christmas this year than last are much more likely to feel optimistic about the economy getting better rather than it getting worse: 62 percent of those planning to spend less feel the economy will get worse in the coming year versus 42 and 45 percent among those planning to spend more or the same.

Political party leanings also make a difference. Consumers who plan to spend less this Christmas are more likely to lean toward the Democratic [49 percent] rather than the Republican [29 percent] parties. However, big holiday shoppers are about as likely to be Democratic [26 percent] as Republican [29 percent].

There is no difference in the level of personal happiness between those who plan to spend more and those who plan to spend less, with both scoring 1.56 on the happiness scale. Those who plan to spend the same are markedly happier than the average of the population at 1.98.

All shoppers, regardless of their level of personal happiness, whether planning to spend more, less or the same, have fundamentally similar sources of personal happiness.

Bottom Line

But bumpy ride or not, this is still the peak selling season for 2007. Consumer reluctance to spend for Christmas actually creates opportunities for newspapers to sell advertising to retailers likely to be desperate to make their numbers.

Retailers have already jump-started the holiday season with price-driven promotions aimed at moving inventory and salvaging sales which may otherwise be lost.

But while effective in moving merchandise, price cuts alone are unlikely to maximize sales and satisfy consumers? desire to make themselves and their loved ones feel cherished and happy.

Christmas marketing is complicated by the extreme differences between consumers resolved to spend less and those looking forward to spending more or the same.

A retailer coming to a newspaper for help in spreading the word about price cuts and promotions should be creative about how to make their store a vehicle for delivering experiences that make for happiness and for staving off the experience that make for pain.

Retailers this season, more than in prior seasons, need to find ways to promise customers relief from boredom ? fun ? and providing guidance as to finding gifts that give them the pleasure that comes with accomplishing something.