A Purdue University retail management professor believes holiday spending will increase this year. Richard Feinberg predicts shoppers will spend around 4 percent more than last year. In 2013, spending was up close to 3 percent compared to the previous holiday season. October 13, 2014

News Release

WEST LAFAYETTE, Ind. – Holiday retail sales are likely to be about 4 percent higher than they were last year, says Richard Feinberg, a Purdue University professor of retail management.

Total holiday spending is predicted to be close to $986 billion, he says. Surveys show that shoppers are likely to spend an average of $650 to $725 on gifts.

In 2013, holiday spending increased 2.8 percent over a year earlier.

Feinberg warns that geopolitical crises and public health concerns could lower consumer confidence and increase cautiousness about spending if those stories remain in the news.

Some other observations on the 2014 holiday retail season:

-While sales are likely to increase, so are the number of retailers and Internet sites available to consumers. That will dilute any increase for many retailers, Feinberg says.

-Most of the non-luxury, large retailers will appeal to consumers' prime motivation: price. That means heavy promotions and constant sales. The main issue is that wage growth has been flat to low for most consumers, and increasing health care costs have offset low inflation.

Flash and limited-time sales will be used by a majority of retailers because they create a sense of urgency and they work.

-Late-night and even 24-hour shopping has become so prevalent that many retailers now feel they have to be open nearly all the time to keep up with the competition, Feinberg says.

-Black Friday is now Black November, Feinberg says. Retailers no longer wait for the Friday after Thanksgiving to launch big door-buster sales. A dollar spent on holiday gifts in the first week in November in a store is a dollar that another retailer cannot get in the third week of November.

Still, 75 percent of consumers say they will shop on Black Friday, either in traditional stores or online.

Source: Purdue University

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