(USA Today) - Fewer job cuts and rising wages are giving shoppers the confidence to spend more this holiday season on gifts, trips, and experiences like dining out, according to a new forecast.
The average American is expected to spend $1,189 during the holidays, 6% more than last year, says consultancy PwC.
"We're near full employment and are continuing to see wage growth,'' says Steven Barr, PwC's U.S. consumer markets leader. "So our survey respondents have told us, especially the higher income earners, they plan to spend significantly more this holiday season.''
But those making six figures are primarily responsible for the expected spending surge, with those earning between $100,000 and $149,900 spending $1,609 each on average, 15% more than last year. Those earning at least $150,000 are expected to spend $1,958 on average, an 8% uptick.
That's compared to those making over $60,000, who will increase their average spend by 5% to $1,507 or those making less than $25,000 whose spending is predicted to drop 3% on average to $640.
Some holiday spending will go toward travel, or outings to a show or to enjoy some other form of entertainment. But when it comes to shopping for presents, 88% of those surveyed say they will do their buying in stores, a finding that may surprise some in the wake of well-known retailers like Sears and J.C. Penney shuttering scores of stores because of declining sales and foot traffic.
"The store is adapting and the store is transforming,'' Barr says, "but make no mistake, the store is extremely relevant and a part of engaging and inspiring the consumer.''
Though 84% of those surveyed said they will buy gifts via a tablet, computer or smartphone, many consumers are combining the experiences of online shopping and visiting a store rather than choosing between them.
"Retail has become an integrated offering,'' Barr says. "It's no longer a question of 'or,' but it's really become . . . 'and.' "
Retailers are expected to see robust sales during the all-important holiday period when some typically earn as much as half their revenue for the year. Consultancy Kantar Retail has forecast that sales will increase 3.7% during the fourth quarter. Meanwhile, consultancy Deloitte is predicting that retail sales, not counting cars and gasoline, will rise 4% to 4.5% from November to January.
The National Retail Federation, the industry's primary trade group, will release its holiday sales forecast on Wednesday.