Holiday spending will rise this year, survey says

St. Thomas researchers expect Twin Cities shoppers to spend more this year.

The rumored closing of the downtown Macy’s store wouldn’t have much of an effect on the holiday shopping habits of metro residents, according to the Holiday Sentiment Survey from researchers at the University of St. Thomas. Photo by Eric Best

Shoppers in the metro region will spend more this holiday season, according to new survey results from researchers at the University of St. Thomas.

The university’s annual Holiday Sentiment Survey predicts Twin Cities shoppers will spend $918 per household this shopping season. The new numbers, the highest projected amount in the survey’s 15-year history, show an increase of $68 or about 8 percent over last year, when researchers expected spending to drop slightly.

Holiday shoppers will spend a total of $1.24 billion this year, up 9 percent from last year’s project $1.14 billion, based on responses from more than 300 metro-area residents. Despite the projected increase, this year responses were slightly less optimistic, with 15 percent of respondents saying they plan to spend more compared to last year, 25 reporting they would spend less and 61 percent saying they’d spend about the same.

The results fall within the range of predictions of national surveys like Deloitte & Touche, which is predicting an increase of 3.6 to 4 percent in holiday spending, and PwC U.S., which expects a 10-percent jump.

“There were no big surprises in our findings,” said Sandra Rathod, one of the survey’s researchers and a faculty member of the Opus College of Business, in a statement. “It is clear that Twin Cities shoppers are optimistic and their responses generally reflect national surveys and projections for 2016.”

The survey also takes a look at where shoppers plan to spend their money and what they plan to buy.

Gift certificates, cash, clothing/accessories and books all remained in the top five most popular gift choices compared to last year. Of 14 categories, video games, jewelry and furniture rounded out the bottom of this year’s results.

St. Thomas researchers have seen huge changes in where Twin Cities residents plan to shop. In 2002, the survey’s first year, respondents said they planned to spend just 7 percent of their holiday shopping budget online. Now that number is 39 percent, roughly the same as the percentage going toward items in big malls like Southdale or Rosedale.

“The Internet has gone in a few years to barely being there to being an equally planned place to spend,” said Lorman Lundsten, a researcher and a professor emeritus of marketing.

The most popular e-commerce sites continue to be “Internet-only” sites like Amazon — the survey’s most popular website by far — and “bricks to clicks” retailers like Target, along with Macy’s, Kohl’s and Best Buy. “Broker-facilitator” sites like eBay and deal sites such as Groupon were the least popular.

For brick-and-mortar stores, Mall of America, Rosedale and Southdale continue to be the top shopping destinations for shoppers to visit at least once this season, though this year shoppers said they planned to do most of their shopping at the Mall of America, Ridgedale and Burnsville Center. The survey includes 16 shopping destinations across the Twin Cities and neighboring suburbs.

The survey has also seen the rise of outlet malls and retail centers like Woodbury Lakes, the Premium Outlets of Eagan and Albertville Outlet Center, which ranked 7th, 10th and 14th, respectively, on the list of sites where shoppers expect to do most of their shopping this year.

“They’re in there fighting with the share of the market with the malls. That’s really something,” Lundsten said.

The survey included a bonus question asking respondents if the closing of the downtown Minneapolis Macy’s store at 7th & Nicollet would affect their spending behavior.

While no closing plans have been released, Macy’s announced last fall that the store, once the longtime home of Dayton’s department store, was one of several potential redevelopment projects.

A vast majority — 83 percent — said they didn’t expect it would change their habits and eight percent said they would do the same amount of shopping at Macy’s, but at a different location.

Downtown Minneapolis and downtown St. Paul have struggled to capture the attention and money of shoppers, Lundsten said, with the two areas ranking 10th and dead last on the list of where respondents plan to visit at least once this season.