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----America's Research Group's Annual Holiday Consumer Survey Predicts A Mere 3.8% Increase In Sales Over Last Year's Record High Of 6.8% ----

New York, New York, November 16, 2000
Rising gas and heating oil prices and a Presidential election that is still unresolved will affect holiday spending in 2000, according to a newly-released survey on consumer's Christmas shopping plans. Released by America's Research Group (ARG), the survey projects Christmas sales gains of only 3.8% this year versus a record high of 6.8% last year. ARG has conducted this Christmas consumer survey annually for the past six years and has accurately predicted the yearly sales increases in each of those six years. C. Britt Beemer, founder and CEO of ARG said: "Our survey is a bit late this year because last week, 56% of the consumers we spoke to were so captivated by the strange outcome of the Presidential race that they were unable to talk about their Christmas shopping plans during this historical period. The good news is Americans are viewing the Christmas season with some optimism. But there are more cautionary signs out this year than we've seen in many previous seasons."

  • 20% of the more than 1000 consumers surveyed said they would spend over $1,000 on Christmas gifts
  • 32.7% said they would be out there fighting traffic and crowds in the stores the day after Thanksgiving
  • 27% planned to buy Christmas gifts for more than 10 people (according to ARG, more than 25% is considered excellent)
  • 38.8% feel the quality of merchandise being offered in stores has improved
  • 81.9% of households believe Christmas and the activities surrounding the holiday season are still as important as it was 3-to-5 years ago
  • 77.2% still enjoy the Christmas shopping experience

The bad news is a combination of dismal third quarter reporting and fourth quarter sales projections from retailers. Consumers have been feeling the pinch, cutting back on their spending plans:

  • Only the big discounters such as Kmart, Wal-Mart and Target will see healthy sales this Christmas (31.6% said they will spend more of their holiday dollars in these retail outlets). However, other major retailers are going to have a tougher time: 24.9% said they will spend less in national department stores (JCPenney, Sears), 32.9% will spend less in major department stores (Macy's), 30.8% estimate they will spend less in membership warehouse clubs, 30.4% will spend less through catalogs, and 30.2% will make fewer purchases via TV shopping programs
  • Internet purchases will remain flat this year or about same as last year with only 20% saying they will purchase less
  • 41% said they will pay for their holiday purchases with cash (using credit cards encourages higher purchases)
  • Of those planning vacations during the holiday, 79.4% will opt for driving over flying (in previous years, 40% traveled by plane, 60% by car). Only 13.4% will fly, underscoring consumers concern over gas prices, and the perception that the airlines will not be offering discounted fares during this holiday season
  • Americans have still not lost their senses. If given $1,000 as a Christmas present 33.l% (or 1/3) said they would use the money to pay bills
  • 55.4% fully expect stores to be short-staffed and checkout lines to be long, which will make the holiday shopping experience less pleasant this year
  • Price ranges for gifts will decline in 2000 with the most popular price range for gifts being $26-$35 this year over last year's record high of $36-$50, or 10-15% decline
  • Significantly - consumers plan to spend less on themselves this year with only 36.4% planning to purchase something nice for themselves-a 50% decline (66%) from previous years
  • 23.8% feel they will spend less on holiday gifts because of concerns about the increase cost of gas and heating oil prices (this concern has never reached higher than 12% in previous consumer surveys). Previous consumer issues that rated higher levels of concern have included bad economic news and overseas military conflicts

"The roller coaster ride of Wall Street, a decline in spending on apparel, the energy crisis, and now the uncertainty over the Presidential election has made consumers nervous," explains Beemer. "Shoppers traditionally treat themselves to something nice when they do their holiday shopping, and our consumers are telling us this year they will be spending less on themselves. Because more people plan on paying for their holiday purchases with cash, this means they will be spending less than they normally would with credit cards." Only the big discounters look to be the sure winners with gift buyers this year. "While the Internet won't lose business, no growth means continued bad news for those who thought the Internet would be the next great marketplace. If snow and inclement weather come early this year, retailers had better offer discounts and sales," advises Beemer. "Otherwise this Christmas for them will be a very slippery slope."

The ARG Christmas Survey results as well as previous years' comparative totals are available upon request.

C. Britt Beemer is available for interviews.
For more information Contact America's Research Group.

America's Research Group, Ltd. (ARG), is a full service consumer behavior survey research company with more than 20 years experience. ARG has interviewed more than 4 million consumers. Utilizing both quantitative and qualitative research, the firm works with clients to develop practical and successful marketing strategies for pace-setting companies in the fields of home furnishings, appliance and electronics retailing, banking and finance, automobile dealers, department stores, specialty and mass merchants. Clients include Sealy Mattress, Barnes & Noble, AT&T Wireless, Eckerd Drugs, Broyhill Furniture, Thomasville Furniture, American Eagle Outfitters and many others. ARG claims a plus or minus 3.8% accuracy.

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