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November 1, 2005 — After an unimpressive one-point jump last month, it appears the Experian/Gallup Personal Credit Index may be headed south for the rest of autumn. Which begs the question retailers everywhere are asking themselves: Will rising prices put a damper on consumers' holiday spending this year?
November's Personal Credit Index, a record low of 74, is down four points from October's level of 78. With Personal Credit Index levels hovering in the seventies for the past three months now, August's level of 98, representing a surge in consumer confidence, now seems but a faint memory.
It appears this holiday season may not shine as brightly as last year's. Literally. Of those who celebrate Christmas...
- Only 52% plan to put up holiday lights-down 6% from last year's percentage of 58%
- 47% of those not planning to hang lights cite the cost of electricity as their main reason
Concerns over higher prices for energy, gasoline, and other essentials have many consumers (32% of those surveyed) planning to spend less than last year over the holidays. Only 16% plan to spend more, with 56% planning to spend about the same. In terms of dollars...
- Half of all consumers will spend under $500
- Half will spend more than $500
- One-third (34%) will spend $1,000+
Only 12% say holiday spending will increase their credit-card debt, indicating most consumers plan to limit their holiday expenditures to cash on hand.
Travel for the Young…and Young at Heart
With high fuel prices translating into higher travel costs, the majority of people surveyed intend to stay put over the holidays this year-roughly 75%. Of those planning to hit the road, roughly 35% are under 30 years old, compared with only 18% over age 65.
Brick-and-Mortar Shopping Still the Norm
Even with gas (and parking spaces this time of year) at a premium, most consumers plan to get out and physically shop for gifts.
- Over 75% will shop at department & discount stores
- 38% will shop online
Of those planning to purchase via the internet, the majority (52%) fall into the 30-49 age category, with 36% falling into the under 30 category, and only 12% 65 or older.
Bonuses the Exception, Not the Rule
Only one in five households (22%) will receive an infusion of cash in the form of a holiday bonus this year. Of those lucky enough to get a bonus, 71% will apply at least part of it toward holiday expenses, 43% will use it to pay off debt, 37% plan to make a special purchase, and 52% will save or invest their end-of-year windfall.
To Tree or Not to Tree?
Finally, of those planning to put up a Christmas tree this season, 54% say they'll use a “manufactured” tree, with only 31% opting for a real one. The average price they expect to pay? For the real thing: $46, and nearly twice as much ($88) for a counterfeit conifer. Apparently, most Americans are willing to pay a premium to forego the dreaded holiday tradition of vacuuming up dead pine needles.
About the Experian-Gallup Personal Credit Index
The Experian-Gallup Personal Credit Index is a monthly survey among a nationally representative sample of 1,000+ respondents, focusing on consumers' ever-changing attitudes and perceptions relating to their current credit situation and future expectations. Specific areas of inquiry include debt load, credit score, borrowing, and repayment ability. The survey's margin of error is +/- 3%.
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Specter of Inflation Spooks Consumers
Dropping to 74, Experian-Gallup Personal Credit Index Re-Establishes All-Time Low
- Rising prices to blame for Americans' perceived drop in spending power & credit worthiness.
One-Third of Americans Plan to Spend Less During the Holidays vs. 2004
2005 Holiday Spending vs. 2004
Where Will Your Holiday Bonus Go?
2-in-5 Say Bills.
% of Americans Who Receive Bonus Using the Funds to:
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