2014 Holiday Spending to Gro-ho-ho: IBISWorld's Annual Release Has Been Updated
New York, NY (PRWEB) December 17, 2014 -- Rising consumer confidence and lower unemployment are likely to bring out the holiday spirit in economically conscious shoppers this snowy season. IBISWolrd projects that total revenue generated by holiday spending in December will increase 2.0% this year, totaling $70.9 billion, This is a sharp contrast to 2013, when a shortened holiday calendar, early Thanksgiving and October government shutdown dampened consumer confidence and spending.
However, before dashing through the snow for the best deals, lackluster sales over the Thanksgiving holiday suggested that retailers might be in for a slightly slower season than expected. Business efforts to push promotions and discounts earlier this year may backfire, as internet and mobile shopping reduces the need to rush out and find good offers early. More consumers will check prices online and shop for the best bargain, leaving retailers to compete with one another by lowering their prices. Overall, despite improving economic conditions, competitive pricing and savvy customers will keep sales from breaking records.
Gifts
Gifts represent the single-largest expenditure during the holidays, generating 77.2% of total revenue. In 2014, IBISWorld forecasts this category to grow 1.8% to $54.8 billion. Although the economic climate has trended upward since the recession, consumers are likely to continue to hold back on extravagant gifting. According to IBISWorld Industry Analyst Andy Brennan, "purchases of gifts, including electronics, toys, clothing and personal care and cosmetic items, are expected to rise higher than their disappointing levels in 2013, but retailers should not expect dramatic increases." Similar to last year, well-timed releases of new video games, consoles, tablets and smartphones will help drive growth for the electronic category, which is anticipated to increase by 2.1% from 2013 levels. Personal care and cosmetics are also expected to see an increase, as consumers take advantage of flexible online shopping options and promotions. Sales of cosmetics are forecast to increase by 3.3% to $5.7 billion this year. Toys and clothing are also anticipated to increase, by 2.4% and 2.3%, respectively. However, heavy discounting will stifle growth in these two categories, as consumers scour the internet for better deals. Meanwhile, jewelry sales and gift cards are forecast to demonstrate less-spectacular growth this year. Consequently, both categories are anticipated to increase by only 0.2% over 2014.
Food
Revenue generated from food and alcohol purchases is expected to grow at a slightly faster rate than total holiday revenue this year, increasing 2.3% to $6.3 billion. "Food prices have outpaced the overall rate of consumer prices in 2014 due to rising farming and transportation costs and higher global demand," says Brennan. However, the recent decline in the world price of crude oil will enable more long distance travel and allow consumers to spend the holidays with family and friends.
Decorations and cards
Total spending on decorations is projected to rise 4.3% this year to $6.5 billion. Seasonal winter decorations, including wreaths, ornaments, nativity sets and nutcrackers, account for nearly two-thirds of total annual decorations spending. Although the number of consumers celebrating holidays during this time of year has declined slightly over the past five years, the average amount spent per person has increased steadily as consumers have opted to decorate earlier. Selling seasonal decorations is now a big business, as the holiday season has become increasingly commercialized. Spending on greeting cards, on the other hand, is anticipated to decline in 2014.
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.
Gavin Smith, IBISWorld Inc., http://www.ibisworld.com, +1 (310) 866-5042, [email protected]
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