Economic, H1N1 worries will impact holiday shopping behavior

The H1N1 flu virus is expected to impact retail sales on Black Friday and throughout Thanksgiving weekend, but perhaps the bigger concern for retailers is that most consumers likely will spend less money this holiday shopping season.

According to the most recent Morpace Omnibus study, nearly half of all consumers are expecting to spend less money during this holiday shopping season than they did last year. Forty-six percent of all respondents anticipated spending less on gifts than they did 12 months ago. Those groups who are even more likely to spend less include women (50 percent), consumers ages 35-54 (53 percent), and individuals earning less than $50,000 per year (52 percent).

Just 5 percent of all respondents indicated they are expecting to spend more this holiday shopping season than in 2008.

These results suggest that retailers should consider ways to specifically attract consumers to their stores and websites, said Morpace vice president of retail services Kirsten Denyes.

"Retailers may be competing for a smaller piece of the holiday spending pie," Denyes said. "It will be more important than ever for retailers to draw the attention of consumers once they walk in a store or log on to their website because the competition will be extremely fierce for disposable income."

During this highly competitive holiday shopping season consumers may respond favorably to promotions focusing on value and the practical utility of the items being marketed, Denyes said. This is a difficult environment for products that appear to be frivolous and/or expensive, she added. 

The H1N1 flu virus remains a concern for retailers as well given that women and individuals age 55 and over are more likely than other consumers to avoid retail stores during busy days like Black Friday, according to the Morpace Omnibus Study.

Overall 15 percent of all respondents said that they will avoid busy holiday shopping days and large crowds because of the flu virus. Additionally, 19 percent of all women and 26 percent of respondents age 55 and over plan to avoid the busiest shopping days such as Black Friday.

"These results are very consistent with what we saw from respondents who answered a similar question about H1N1 last month," said Morpace vice president of retail services Tom McGoldrick. "The main trend we see is that the economy and H1N1 could both adversely impact retail sales this holiday season."