Texans plan to spend more during holidays
POSTED: Thursday, November 19, 2009 - 3:49pm
UPDATED: Thursday, April 8, 2010 - 2:59am
Texans plan to spend considerably more than the nation as a whole this holiday season and they are more optimistic than last year about the economy improving, according to a Deloitte survey that will be released today.
Deloitte's annual holiday survey found that fears about the recession are slowly subsiding, with 55 percent of Texans saying they expect the economy to improve in 2010. Last year, only 27 percent were optimistic after a summer of $4-a-gallon gasoline, escalating food costs and the implosion of Wall Street.
Texans said they plan to spend $1,380 on holiday gifts and entertaining this year, more than the $899 average per household last year and a whopping 21 percent higher than the national average of $1,145.
Driving Texans to "at least temporarily" remove the "padlocks from their wallets" is pent-up demand and a desire to spend more time socializing with friends and family, said Sherrie McAvoy, a partner in Deloitte's Dallas office.
Nongift spending is up significantly across the four categories measured by the survey: home/holiday furnishings, socializing away from home, entertaining at home and nongift clothing.
Texans told Deloitte they will spend less on gifts but more on entertaining and decorating.
The average number of gifts Texans plan to buy will decline to 20 from 25 in 2008. Their gift spending is expected to be down 7 percent to $464, from $498 last year. But their spending for entertaining, decorating and other holiday cheer is projected to rise to $916 from $401 last year.
Even though consumers said they will spend more this year, how they plan to spend it continues to reflect frugal behavior, McAvoy said.
Nearly seven out of 10 Texans said they plan to shop differently because of economic concerns. Three out of four said they will buy sale items. More than half say they will buy lower-price items or use more coupons.
The 45 percent of Texans who said they will spend less are doing so because they are worried about job losses and pay cuts yet to come. That may reflect a later arrival of the recession's impact in Texas - those concerns more than doubled from last year.
The generally upbeat Texas responses match other consumer tracking results. The Conference Board Consumer Confidence Index measuring the region that includes Texas, Arkansas, Oklahoma and Louisiana has been consistently higher than the national average during the recession.
Unemployment is lower here than other parts of the country, and Texans see themselves in better shape when it comes to home values, McAvoy said. Only 8 percent cited declining home values as a reason for spending less.
Despite so many stores around them, Texans said they were more likely than U.S. consumers overall to shop online. Fifty percent said they plan to use the Internet for shopping, compared with 42 percent nationally.
One reason is that many retailers' Web sites let shoppers plug in their ZIP code to quickly locate stores where merchandise is available, McAvoy said.
There is one sign that Texans are trying to stay within a budget - three out of four plan to forgo plastic and pay with cash, checks or debit cards. That's not a good sign for retailers because shoppers who use credit cards tend to spend more per transaction.
Texans are also leveraging new ways to save money: One in four plan to use their mobile phones as a shopping tool to obtain coupons and to research products and prices.
"Consumers are still looking for value, and they're careful about where they spend their money," McAvoy said.
That consumer mindset is showing up in declining retail sales. The Texas Comptroller said sales tax collections from retailers and restaurants fell 3.9 percent in October from a year ago.
The Deloitte survey was conducted between Sept. 24 and Oct. 2. Its results are based on 517 respondents in Texas and 10,878 nationwide. The margin of error was plus or minus 1 percentage point.
For Texans, discount stores are still a top destination, with 61 percent planning to shop there.
Gift cards remain the top gift: Two out of three Texans plan to give gift cards.
More Texans say they're buying electronics, with the breakdown as follows:
Computer and video games 30%
Home electronics (Computers, TVs, DVRs) 18%
Game consoles 14%
Personal electronics (phones, cameras) 16%