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Holiday shoppers (AP Photo)
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INDEPTH: HOLIDAYS
Holiday sprint: Let the sales begin
CBC News Online | December 9, 2005
A customer reaches for one of many gift cards to choose from at a Best Buy store. The rising popularity of these nifty pieces of plastic is pushing more holiday shopping into January and after. (AP Photo/Jim Mone) |
December 2004 went down as the best holiday shopping season ever - for retailers -- but one of the most frustrating for shoppers. No Cabbage Patch or Tickle Me Elmo mania to battle - just crowds of last-minute shoppers, buoyed by a healthy economy, real income growth and low interest rates.
And the same conditions carried over to December 2005.
Statistics Canada reported that Canadians dropped $34.5 billion in retail stores in December 2004. That's about triple the average monthly take for retail stores and it accounted for more than 20 per cent of their annual revenue.
On average, Canadians spent $804 each in December 2004 - well above the monthly average of $555 for the rest of the year. The figures don't include sales by the automotive retail sector.
Moneris - one of the largest processors of debit and credit card transactions in the country - says for the past few years, Dec. 23 has been the busiest shopping day of the year. On Dec. 23, 2003, the company processed 8.49 million transactions - or 607 a second.
The company said its data suggest some retailers experienced a rosier shopping season than others. Credit and debit spending at video rental stores rose by 15.4 per cent over 2002. Clothing stores showed increases of 12.5 per cent, while credit and debit sales at music stores were 5.1 per cent higher than 2002.
It's not the big-ticket items - like furniture and electronics - that Canadians grab as the holiday shopping season winds down. Other Statistics Canada surveys have shown that consumers avoid the December rush and buy those items in November.
"What we're seeing in the numbers is a big increase and it's a Christmas-related increase," Statistics Canada's Richard Evans told CBC News. "But it occurs in November. The type of stores that sell expensive items see their sales go 12 to 15 per cent higher than normal averages."
Evans said it's the cheaper stuff - like CDs, clothing and toys - that fuels those 607 transactions per second Moneris handles.
The Retail Council of Canada, which represents 9,000 retailers in most sectors of the economy, asked pollster Ipsos-Reid to survey the spending intentions of Canadians before the 2004 holiday season.
Among the survey's findings:
- Nine in 10 Canadians planned to give gifts during the 2004 holiday season.
- Much of the spending would come late in the season, which is why Dec. 23 has been the busiest shopping day of the year.
"What we're seeing is consumers and retailers staring at each other, waiting to see who's going to blink first," the council's Kevin Evans said. "When the deep discounting happens, it's almost like a starting gun for consumers to say 'OK, now is the time to go shopping.'"
Some of those hoping to avoid the crowds may have turned to the internet to do their shopping. Statistics Canada reports that online sales, which jumped about 25 per cent two years ago, held steady last year. They make up a small part of retail activity, about $3 billion over the year.
And those who just can't decide what to buy are turning to gift cards in exploding numbers. Just about every major retailer offers gift cards in various denominations that can be redeemed for merchandise.
In 1995, North American sales of gift cards amounted to about $1 billion. Sales for 2004 rang in at around $45 billion.
For retailers, gift cards are like money in the bank. At the very worst, the recipient of the card will come into the store after Christmas and redeem the whole amount for merchandise. Often, the shopper will buy more than the value of the card, increasing the store's sales.
Sometimes the card is never redeemed and the sale of the card turns into 100 per cent profit.
The cards also differ significantly from those old-fashioned gift certificates. You'd take the certificate to the store, buy your merchandise and if it was less than the value of the certificate, you would get change. If there's money left on the gift card, it stays there until you spend it. A lot of those cards will automatically decline in value if you fail to spend the money within a certain length of time.
Gift cards also mean retailers, who often suffer through a very quiet January, are seeing increasing sales in the weeks after Christmas.
According to a Statistics Canada survey, retail sales in January 2004 and January 2005 showed strong gains over the same time in previous years.
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Canadian men spend an average of $216 on gifts for their spouse
Canadian women spend about $158 on their spouse
Parents buy $187 worth of gifts for each of their children
Each Canadian spends an average of $358 on holiday food
Total cost of holiday gift-giving, entertaining, and eating for each Canadian
adult is $1,300
*VISA survey
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