Christmas Spending Falls Off A Cliff

By now everyone knows that Christmas spending will be down this year, but the question remains on just how far it will fall.

The answer, it seems, will be off a cliff. That’s the story in a recent survey released just last week.

According to the American Research Group holiday spending will drop by almost 50% this year.

In short, it is a retailer’s worst nightmare.

Read on:

From the group entitled: Shoppers Cut 2008 Christmas Spending Plans in Half from 2007

“Shoppers around the country say they are planning to spend an average of $431 for gifts this holiday season, down from $859 last year according to the twenty-third annual survey on holiday spending from the American Research Group, Inc. The overall average planned spending is down almost 50% from 2007 and it is the lowest level of planned spending recorded by the American Research Group since 1991.

While planned spending increases as Christmas approaches, a majority of shoppers are beginning the holiday shopping season saying they plan to cut their gift spending in half from a year ago. Shoppers saying they will pay full price for holiday gifts this year (14% of all shoppers) show the smallest decline in planned spending - $751 this year, down from $763 in 2007.

In telephone interviews with a random sample of 1,100 adults nationwide conducted November 10 through 13, 2008, the average planned spending of $431 for 2008 is down about 50% from planned spending in the 2007 survey.”

By the way, for comparison here’s the chart for holiday spending going back to 1998. This year could be one for the record books.

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