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Survey Energy costs could cut into holiday spending
WASHINGTON (11/20/07)—Consumers are likely to continue a holiday trend established in recent years of reduced spending on gifts, and this year’s high energy costs are expected to make the seasonal spending increase even weaker than in the past few years, according to the results of the eighth annual survey commissioned by the Consumer Federation of America (CFA) and the Credit Union National Association (CUNA).
Click to view larger image CUNA Chief Economist Bill Hampel during this morning's news conference at the National Press Club briefs reporters about findings of the Eighth Annual CUNA/Consumer Federation of America Holiday Spending Survey. (Photo provided by CUNA)
The bottom will not fall out of retail spending but it will be softer," said Bill Hampel, CUNA chief economist, said at a press conference held to discuss the survey findings. Thirty-eight percent of respondents said higher gasoline and energy costs will have a negative impact on this year’s holiday spending. This is up from 32% last year. The price of gifts is also playing a role in consumer attitudes toward spending, with 32% saying they would somewhat or greatly decrease their spending as a result. That number was up from 26% last year. “Your family’s current finances” and “your general household expenses” were cited less frequently, with fewer than 30% citing each of these factors. “It is noteworthy how frequently consumers cited rising energy costs as a reason they plan to cut back their holiday spending, far more frequently than they cited general family finances,” said CUNA Chief Economist Bill Hampel. “They are clearly quite concerned about the escalating price of gasoline and home heating oil.” The CFA/CUNA survey was conducted November 8-11 among more than 1,000 representative adults Americans by Opinion Research Corporation. The survey’s margin of error is plus or minus 3 percentage points. The CFA and CUNA suggest the following holiday spending tips to help consumers avoid falling into a seasonal debt trap:
* Make a budget and list what you will buy and how much you can afford to spend and then stay within that budget: * Comparison shop: You can easily save more than 10% on most items by comparing prices at different stores. Often the savings are even greater; * Pay off your holiday debts quickly and remember you are less likely to overdo is you pay with cash or check than if you use either credit or debit cards; *Start saving now for 2008—open a Christmas Club account: While these accounts do not pay much if any interest, they provide a practical way to save small amounts over time; * Be smart about gift cards: read the fine print on each card. There may be a fee for checking your balance as well as a monthly inactivity, maintenance, administrative, or service fee; and * Pay attention to return policies. Also keep receipts and note time limits, restocking fees, and other factors that may affect your recipient.


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