November, 2012 – This article from Barron’s Penta Daily discusses the 2012 holiday spending plans of the affluent. (http://blogs.barrons.com/penta/2012/11/21/wealthy-cutting-holiday-spend/)
By Christiana Cefalu
In preparation for the kickoff to the holiday season known as Black Friday (as if the ever-earlier arrival of poinsettias and twinkling lights weren’t enough), we spoke with Ron Kurtz, head of American Affluence Research Center, who asked holiday-themed questions of 435 individuals plucked from the wealthiest 10% of American households. Respondents had a minimum net worth of $800,000.
AARC found that 71% of respondents plan to spend the same amount on holiday gifts this year as in 2011, while 23% say they will spend less. The remaining 6% planning to spend more than last year reported an average potential spending increase of 11%. And those planning to spend less reported an average potential decline of 13.1%.
Accounting for these three groups and the 7% of respondents who do not plan to buy holiday gifts at all – bah, humbug – and it looks like overall gift expenditures per wealthy household are expected to decline 2.4% from last year. That’s an average gift-giving budget of $2,102 per respondent, still about four times the average gift spending of all American households, according to the National Retail Federation. According to the NRF’s holiday consumer spending survey, however, all gift expenditures will increase 6.3% during the holidays.
But timing is everything – and emotions are running particularly high this year. The survey among the affluent was conducted in September, when the market was looking up, Kurtz notes. And even though people report their intent, there’s always the possibility that “they may spend more than they plan,†he said.
Or less if the markets are any indication as to which way the wind is blowing. Other curve balls: Superstorm Sandy, which AARC says may impact spending in affected East Coast areas that are emotionally and financially preoccupied. It’s also not at all clear how continuing uncertainty about how Congress will address the fiscal cliff is going to affect spending plans this holiday.
Whatever the spending trend turns out, we spotted one gift that’s hot: cold cash. AARC found that 48% of women list some form of “currency,†like gift cards or cash, on the top of their holiday wish list. Among men, however, 31% wanted cash as well, but the biggest block, 45%, wanted clothing. Sounds to us like a little role reversal is in the cards for the holidays.