Business - Nielsen;Holiday Shoppers to buy less

Steve McClellan


NEW YORK Shoppers will buy fewer goods this holiday season, versus a year ago, according to a Nielsen Co. retail forecast that projects a 1 percent decrease in the number of items that consumers will buy, the first decline since the recessionary fourth-quarter 1991 period.

While unit sales are expected to be down, dollar sales will be up, 4.7 percent to $98 billion due to higher prices compared to a year ago, Nielsen said.

Nielsen's gloomy forecast is in line with a projection issued last month by TNS Retail Forward predicting total dollar sales during the holidays would climb an anemic 1.5 percent, the worst in 17 years.

The Nielsen forecast includes projected sales at food stores, drugstores, mass merchandisers and convenience stores, across 125 product categories tracked by the company.

"All consumer, economic and trade indications point to a flat-to-declining holiday selling season across the core consumer packaged goods (CPG) categories that Nielsen tracks," said James Russo, vp of food sector marketing at Nielsen.

The projected decline in holiday season unit sales, said Russo, "is directly tied to the current volatile economic environment, during which close to 33 percent of households across all income levels are projected to spend less this holiday season." That projection comes from a Nielsen Consumer Household survey conducted during the third quarter of 2008.

Russo notes several trends that have emerged since the economy began its downturn earlier this year, including "trading down, whether from higher-end retailers and brands to value retailers and brands, or from vacations to "staycations."

Russo also said that consumer decisions are falling into either "necessary" or "discretionary" spending and that at-home entertainment is resurgent. And, he said, "consumers are seeking and responding to value solutions, as evidenced by the reemergence of coupon activity as an effective promotional tool."

Adweek is a unit of Nielsen Co.