DOWNTOWN CORE—A University of St. Thomas survey aimed at gauging the mood of the holiday shopper suggests the retail scene this year could be poised for a rebound.
The results of the ninth annual “Holiday Spending Sentiment Survey,” conducted by researchers at St. Thomas’ Opus College of Business, were released on Nov. 17. Researchers David Brennan, Lorman Lundsten and John Sailors polled 306 metro-area households over the Internet, asking how much shoppers plan on spending this year, where they plan on spending it and what they plan to spend it on.
The big take away? Hints of recovery glimmering through the economic gloom.
“We see regional malls and downtowns [both Minneapolis and St. Paul] perking up this year after being down for several years,” Brennan said during a teleconference.
Overall, the survey suggests that household spending this year will increase by 6.8 percent over last year, with each household spending about $680 on holiday gifts. This is a slight bump-up from last year’s dismal figure of $637 per household, which was the lowest since St. Thomas first instituted the survey in 2002. But it’s still a far cry from the pre-recession days, when average spending per household hovered consistently in the $750 to $800 range.
Only 30 percent of respondents said they were planning to spend less this year over last. This is a strikingly low percentage — the lowest in survey history. But Brennan warned that the figure could be deceiving, as the paltry spending of 2009 sets a very low bar.
“Does this mean happy days are here again? Well, yes and no. It is better than last year, but not back to what it was before the recession,” said Brennan.
Still, the predicted 6.8 percent increase for the metro area is good news, as even the most optimistic of national forecasts are anticipating an increase of only 2 to 4 percent across the country. Even with the boost from a 1.2 percent increase in number of households, the increase is still a strong one.
That is, if it actually occurs. Brennan stressed that the survey only records how consumers think they will spend.
Downtown Minneapolis in particular inched ahead in its popularity as a shopping destination. Given a list of 11 regional malls and downtown areas and asked where they were planning to shop, survey respondents listed Downtown Minneapolis as their fourth highest preference. This was the same ranking as last year, but the percentage that chose Downtown was much higher — 12.4 percent of shoppers this year over 9.2 last year.
In a slightly different question, shoppers were asked where they planned to do most of their gift buying. Here, Downtown fell to eighth of the 11 options. Still, Brennan said that this was “higher than in recent history,” and he pointed out that Downtown is still outranking some suburban areas like the Eden Prairie Center.
Forty-six percent of total holiday dollars are expected to be spent at regional malls or downtowns.
“Overall, we can say that consumers are returning to the malls and downtowns after a two-year hiatus, and this reflects a shift away from big-box stores, many of whom are discounters, to more upscale stores in the malls and downtown areas,” said Brennan.
Asked if he was surprised by the slight optimism of the results, Brennan pointed out that Minneapolis is generally faring better than the rest of the county during the recession, with unemployment a good two points below the 9.6 national average and foreclosure statistics that are less bleak than those in other areas.
“People who have jobs and are getting some increase in pay are feeling much better about themselves. As a result, they’re becoming less conservative and more willing to go to the malls and do a little more upscale shopping than they had previously. “