NPD Predicts Unhappy Holidays for Retail

Between the recent eBook Reader price war that broke out, the flurry of tablets just around the corner, and the recession finally starting to let up, you would think this holiday shopping season is gearing up to be busier than ever. You'd also be wrong, according to new data by market research firm The NPD Group. The NPD Group just finished its ninth annual survey of consumers' holiday spending interests, and if you're a retailer banking on strong sales for the holidays, go ahead and stop reading now.

Almost a third (30 percent) of respondents said they plan to spend less this year than last. Just 9 percent said they plan to spend more, which is down from 11 percent in 2009.

"Even though the recession is technically over, lingering concerns are keeping consumers in a cautious frame of mind," said Marshal Cohen, chief industry analyst, The NPD Group. "We are seeing what I call 'calculated consumption,' and I believe that it is a consumer mind-set that will be around after holiday shopping is over."

"What this means is consumers will be looking to find what to buy, when to buy, and where to buy before even leaving the house," said Cohen. "This eliminates the rushed decisions and can potentially eliminate some impulse purchasing from the holiday shopping equation."

Compared to last year, The NPD Group noted a drop-off in intended purchases across the board. Clothing still looks to be the biggest seller, but is down 7 percent from one year. Only 16 percent of respondents plan on shopping for electronics, compared to 24 percent in 2009.

"Again, this year the real challenge is the absence of newness and excitement," observed Cohen. "The more progressive brands will learn from mistakes of the recent past and ramp up the excitement in their product offerings. And in turn retailers will be looking for those products to ignite consumers’ passion to spend this holiday."