IRI MarketPulse survey: 2014 holiday sales expected to rise to $616.9 billion, up 3.1% year-over-year
CHICAGO — Shoppers are rolling into the holiday season on a high note and are willing to spend a bit more, according to the latest IRI MarketPulse survey released Tuesday.
The National Retail Federation is predicting retail sales will be up by 4.1%in November and December. Overall, 2014 holiday sales are expected to rise to $616.9 billion, which is more than a 3.1% increase over 2013.
”Marketers have a lot to feel good about as we enter the 2014 holiday season,” stated Susan Viamari, editor, Thought Leadership, IRI. “Despite the bumps along the road, consumer confidence is definitely on an upward trajectory and this is clearly evidenced in holiday spending plans.”
Constructed against a benchmark of first-quarter 2011, IRI’s Shopper Sentiment Index provides insight into how the economy is impacting consumers and changing how they approach grocery shopping. The index provides perspective in terms of price sensitivity, brand loyalty and changes in spending required to maintain desired lifestyles. With a benchmark score of 100, a Shopper Sentiment Index score of more than 100 reflects consumers who are less price driven, more loyal to favorite brands and better equipped to maintain their desired lifestyles without changes as compared to Q1 2011.
The latest index across all ages surveyed for Q3 is 121.4 compared to 108.5 in Q3 2013, which is the highest point the index has reached, since it was launched in 2011. In addition, 20% of Americans feel that their financial situation has improved during the past year compared to 17% in Q3 2013. And, 25% also expect continued improvement in the coming months — a sizable jump versus 19% in Q3 2013.
Consumers’ sunnier sentiment is expected to bring good tidings to marketers. Consumers say they will be getting into the spirit and are planning to spend just a bit more on holiday celebrations. As many as 8% of consumers say they will be spending more on celebrations compared to 6% in both 2013 and 2012. In contrast, 36% of shoppers will be spending less on celebrations in 2014 compared to 43% in 2013 and 45% in 2012.
Overall 5% of consumers say they will be spending more on food and beverages in 2014 compared to 4% in 2013 and 3% in 2011. Furthermore, budgetary cutbacks are becoming less pervasive, with approximately one-quarter of consumers (28%) intending to spend less this year versus a year ago, compared to 33% in 2013 and 36% in 2012.
“The operative word here is ‘caution,’” Viamari said. “These aren’t huge gains, but they are cautious gains. And, a 2% increase in the overall holiday pie for CPG marketers is definitely good news, where a point gain can make a huge difference to the top line.”
The MarketPulse survey also uncovered the following key consumer attitudes regarding the holiday meal:
62% will prepare the best meal possible, but will work to keep cost down;
18% will put on the best meal possible and view holidays as a time to splurge; and
65% will buy as many or more gourmet/premium products this year versus last year.
When it comes to holiday shopping, nearly everyone is entering the process with a shopping list in hand. And it’s absolutely critical to make it on consumers’ shopping lists, because 33% of consumers say they are cutting back on additional/unplanned purchases this year. On the flip side, impulse buying cannot be ruled out completely. With 33% of consumers saying they will be leveraging in-store promotions, there is a chance for last-minute purchases. So, compelling in-store promotions are still a must for CPG marketers.
Savings are at the top of the wish list for shoppers, so many different savings tools are being embraced this year. The notable point here is that consumers will rely more heavily on online coupons from a variety of cyber locations:
30% will use more coupons from manufacturer websites;
28% will rely more on coupons from retailer websites;
27% will embrace coupons received via email;
26% will tap into coupons offered on group couponing sites; and
22% will leverage more coupons on social networking sites.
”Marketers are certainly in a position to unwrap a nice boost in sales this holiday season,” Viamari said. “But, maximizing this opportunity will require marketers to communicate a clear and concise value proposition early and often throughout the shopper journey.”