ACG Research Suggests U.S. Holiday Spending Will Be Up Slightly in 2014
November 26, 2014
(New York, NY): As we approach the 2014 holiday season, there are signs for cautious optimism on consumer spending. For example, the U.S. has experienced slow but steady economic growth for the past several years, and the national unemployment rate stood at 5.8% in October according to the U.S. Bureau of Labor Statistics, which the agency notes has not been that low since July 2008.
Auriemma Consulting Group, Inc. (ACG), a leading consulting firm in the payments field for the past 30 years, believes 2014 holiday spending is likely to show slight increases over 2013 holiday spending levels. According to recent research conducted in Cardbeat®, ACG’s syndicated research report derived from a web-based survey of credit card users in the U.S., more than half (52%) of respondents say they will be increasing the amount they spend this season. However, the biggest increases will come from the youngest consumers, who begin at a lower dollar amount of spending.
Marianne Berry, Managing Director of the Payment Insights practice at ACG, says “Barring any unforeseen factors such as weather, 2014 holiday spending should show a moderate overall increase.” She adds that ACG’s ongoing research shows that many U.S. consumers have working been to deleverage their personal balance sheets, so many are in better fiscal condition than they have been in years. However, in the absence of rapid income growth, it’s hard to envision just what might drive a big jump in overall sales. ACG’s annual forecasts of holiday spending have proven directionally correct over the past decade.
One bright spot for the banking and payments industries, she says, is that more consumers (81% in 2014 vs. 72% in 2010) this year say they’ll plan on using credit cards to pay for their holiday purchases, although it’s worth noting that only a portion of this group will carry balances on any of their credit cards. Cardbeat data suggests that about 60% identify as revolvers, with 38% who occasionally revolve, and 22% who revolve frequently.
By many accounts, forecasts for 2013 holiday spending growth failed to materialize, with industrywide holiday sales growth for 2013 being the slowest since 2009. Severe weather conditions in much of the U.S. last December, along with fewer holiday shopping days between Thanksgiving and Christmas 2013 adversely impacted consumer spending.
For 2014, the National Retail Federation forecasting November-December 2014 sales (excluding autos, gas and restaurant sales) to increase by 4.1%. By comparison, Gallup’s spending estimate suggests an increase between 2.2% and 3.5% in 2014 U.S. holiday retail sales, and the organization says that the most likely outcome will probably be around 3%.
About Auriemma Consulting Group
ACG is a boutique management consulting firm with specialized focus on the Payments and Lending space. We deliver actionable solutions and insights that add value to our clients’ business activities across a broad set of industry topics and disciplines. Founded in 1984, ACG has grown from a one-man shop to a nearly 50-person firm with offices in New York and London. Visit ACG’s website at http://www.acg.net/. For more information about ACG’s research, please contact Marianne Berry at 212-323-7000 or firstname.lastname@example.org.