Cash is King this Holiday Season

Canadians intend to spend the same as 2008, but with more discipline

TORONTO, Dec. 9 /CNW/ - The modest improvement in Canada's economy in the last two quarters has given a slight jolt to consumer confidence, but the population remains vigilant with a majority not only planning to spend the same on holiday gifts this season as last, but going with bills instead of plastic at the till.

The NPD Group's annual holiday survey of Canadian consumer purchasing intentions found that 59 per cent of shoppers plan to spend $586 on holiday shopping on average in 2009 with 55 per cent foregoing plastic for cash.

"Canadian spending intentions are on par with last year, but we've seen a five per cent jump in the number of shoppers determined to use cash this season," said Pam Wood, Senior Manager, Home, The NPD Group, Canada.

Another indication of the desire to stretch holiday budgets this season is the intention among 53 per cent of consumers to comparison shop before they close the deal - a slight jump over 2008.

Yet, despite the desire among a majority of shoppers for deals and discounts, the fast rise of the loonie has not compelled a stampede to cross border retailers. According to The NPD Group's holiday findings, slightly more than one in 10 consumers bought gifts south of border in 2008 and that number is expected to be the same in 2009 based on consumer purchasing intentions.

"We can't put a precise finger on it, but it's quite likely that consumers are finding good value and sales right here north of the 49th when comparison shopping. Ultimately, consumers go for value ahead of special sale prices when making a purchase," said Wood.

Value and eye catching sales are increasingly being found at mass merchandisers, otherwise referred to as "big box" retailers by consumers. A majority of Canadian shoppers (55 per cent) plan to leverage the mass merchandise channel this season, while 42 per cent have department stores in their sites (a fall of 6 per cent year-over-year), 33 per cent intend to shop at electronics retailers and 29 per cent at toy stores.

    
    Top 10 Holiday Retail Destinations
    ----------------------------------

    % of Canadian Consumers Planning on Shopping at:

    -   Mass Merchandisers         55%

    -   Department Stores          42%

    -   Electronic Stores          33%

    -   Toy Stores                 29%

    -   Warehouse Clubs            25%

    -   Clothing Specialty Stores  23%

    -   Drug Stores                20%

    -   Beauty Specialty Stores    18%

    -   Outlet Stores              18%

    -   Video Game Stores          16%

    -   Home Improvement           15%

    -   Sporting Goods Stores      13%

    -   Home Specialty Stores      12%

    -   Office Supply Stores       9%

    -   Canadian Catalogues        9%
    

Source: The NPD Group, Inc./Annual Holiday Survey 2009

The top ten items on holiday shopping lists in 2009 are similar to 2008 and include the following:

    
                                        2009     2008
                                        ----     ----

    -   Clothing                         53%      53%

    -   Toys                             42%      40%

    -   Books                            41%      39%

    -   Movies (DVD, Blu Ray)            35%      34%

    -   Music                            27%      26%

    -   Jewelry                          23%      23%

    -   Food                             21%      19%

    -   Fragrances                       18%      19%

    -   Skin Care Products               17%      17%

    -   Home/Holiday Decorations         17%      16%

    -   Console Systems/Video Games      15%      15%

    -   Housewares                       14%      14%

    -   Makeup                           13%      12%

    -   Sporting Goods/Equipment         12%      12%

    -   Home Improvement                 12%      11%
    

Source: The NPD Group, Inc./Annual Holiday Survey

"The Canadian consumer has been impressively resilient in the last 12 months, but retailers will need to continue to offer solid value at competitive prices through the next several weeks in order to be successful during the 2009 holiday shopping season," said Wood.

Methodology:

Leveraging The NPD Group's Online Consumer Panel, the survey was fielded in English and French from November 6 to November 16, 2009 to a representative sample of 1,916 adult Canadians. Values based on the total sample (n=1,916) are accurate within +/- 2.2 percent, 19 times out of 20

About The NPD Group, Inc.

The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,700 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us, visit http://www.npd.com/, or follow us on Twitter at https://twitter.com/npdgroup.

SOURCE THE NPD GROUP

For further information: For further information: Brock Penner/Sonia Prashar, APEX Public Relations, (416) 924-4442 ext. 226/223, bpenner@apexpr.com/sprashar@apexpr.com

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