Holiday budgets cut again

New Englanders plan to spend 6.7% less, survey says

Even though the economy is unraveling, New Englanders aren't slashing their holiday gift budgets as much as they did last year. That's because local shoppers did most of their holiday belt-tightening in 2007.

New England residents are planning to spend $539 on gifts this holiday season, 6.7 percent less than the $577 they spent in 2007, according to a national survey that will be released today by Deloitte & Touche USA LLP. That's well below the 19 percent they cut from last year's holiday budget.

Nationally, gift-giving budgets are down 6.5 percent to $532, according to 13,276 consumers surveyed online between Sept. 26 and Oct. 7. That's more than the 2.5 percent that consumers nationwide planned to cut back during the prior year.

Holiday gifts are just one area Americans are cutting back this year as they're squeezed by fuel and food costs, a weak job market, a housing market slump, and stock market losses.

"What you're seeing this year is the cutback in gifts is less dramatic than it was last year, but the cutback in other holiday categories - like entertaining and home decorating - is greater than it was last year," said Tom McCrorey, a partner at Deloitte and leader of its New England retail practice.

Allison Dreyer of Somerville hasn't figured out her budget yet, "but I'm definitely paring it down a bit," said the 29-year-old healthcare product manager, who last year chipped in with her family to buy her dad a digital camera.

This year, instead of giving relatives the usual "splurges or things we don't really need but are fun," she said she's leaning toward more practical presents that they can use every day, like clothing, magazine subscriptions, "maybe coupons or coffee gift cards."

Retailers are trying to get consumers to loosen their purse strings by rolling out aggressive holiday promotions earlier than they normally do. This month, for instance, Wal-Mart Stores Inc. and KB Toys Inc. both touted their plans to sell some toys for just $10.

"No question it's going to be a difficult holiday season," said Jon B. Hurst, president of the Retailers Association of Massachusetts. But, he noted, the National Retail Federation is forecasting holiday spending will increase 2.2 percent over last year.

"In the polling on consumer attitudes and what they're planning on spending, they tend to spend a little bit more than what they plan to. A lot of people stick to a budget, but impulse buying is a big part of it," Hurst said.

Even so, retail analysts say the fight for holiday dollars is going to be fierce.

"Over the last five years, with the easy access to credit consumers had with home equity loans, credit cards, and spending their savings, consumers have been spending at pretty high levels across the categories," said Michael Dart, a retail strategist who leads Kurt Salmon Associates' private equity practice.

But this year, "with anxiety about their income, no more access to cheap credit, and a low savings rate, there's no way for them to spend historically as much as they've been spending."

Nicole C. Wong can be reached at nwong@globe.com.