Consumer Sophistication on Environmental Issues and Global Products Affected Holiday Spending, Annual KPMG Consumer Survey Says

Fewer Consumers Report Increasing Year-Over-Year Spending and Many Changed

Where They Shopped

Dec 26, 2007, 00:00 ET from KPMG LLP

    NEW YORK, Dec. 26 /PRNewswire-USNewswire/ -- Planet Earth and global
 manufacturing issues increasingly figure into consumers' spending
 decisions, with a vast majority of holiday shoppers expressing a
 willingness to pay more for eco-friendly gifts and taking note of the
 country where items were made, says the 2007 Annual National Shopping
 Behavior Survey by audit, tax and advisory firm KPMG LLP.
     In addition, money was tighter this year. While an average of 36
 percent of shoppers previously reported spending more each year during
 similar surveys from 2003 to 2006, just 30 percent of respondents in 2007
 said they spent more than the preceding holiday season on gifts.
     "When consumers had the opportunity, they purchased gifts to fit their
 social conscience," said John Rittenhouse, a KPMG retail partner and
 national leader for Operations Risk Management. "The 'green-quotient' and a
 product's country of origin have become important reputational concerns for
 shoppers, due mainly to recent publicity on the environment and
 manufacturing issues in emerging markets."
     Some 88 percent of the survey respondents, Rittenhouse said, were very
 concerned about the environment, 74 percent indicated they buy
 environmentally friendly products, 60 percent were willing to pay more for
 such items, and 55 percent say they make a special effort to patronize
 retailers with a "green" reputation.
     In addition, 40 percent of consumers said they checked the country of
 origin on potential gifts, with 31 percent using such information to decide
 against a purchase. While 79 percent of those decisions not to buy an item
 involved products from China, toys were involved more than half (52
 percent) of the time.
     Meanwhile, Mark Larson, KPMG's global leader for the retail sector,
 said the survey also showed that well-stocked retailers with a
 customer-friendly return policy continued to attract business, noting that
 76 percent of shoppers said their spending decisions were influenced most
 when a store had the item they expected, while 58 percent cited a store's
 return policy as influential. By contrast, 47 percent said newspaper ads
 affected where they shopped, and 43 percent said a coupon figured into the
 decision, the survey said.
     "Even though price remains the most significant driver to attract
 customers initially, busy shoppers told us they went to the retailer where
 experience told them they could get what they wanted," said Larson,
 underscoring reputational factors as important for boosting traffic and
 sales. "Shoppers will first visit stores that they know are usually
 well-stocked year-in and year-out. That confidence in filling a need comes
 from years of building customer relationships. But miss that expectation --
 even just once - - and it easily sours an often fragile customer loyalty."
     Some 28 percent of respondents who shopped in stores said they spent
 the most at mass retailers, (Wal-Mart, Target and other similar stores),
 while 14 percent said they spent more at power retailers (Toys R Us and
 Best Buy, etc.), 12 percent said specialty stores (such as Gap and Radio
 Shack), 10 percent said midline stores (such as Kohls, JC Penney and
 Sears), and 8 percent said department stores (such as Macy's and
     And the KPMG survey said the internet and power retailers grabbed more
 of "wallet share" -- 4 points and 7 points, respectively. Wallet share
 denotes whether consumers are spending a larger or smaller portion of their
 holiday shopping budgets, where they are making purchases, and why. Other
 retail channels and the changes in their wallet share include: specialty
 stores, catalogs (such as Gap, Disney) and warehouse retailers (such as
 Costco, BJ's) gained 1 point each, while mass merchants dropped 2 points,
 and department stores and off-price (TJX, Old Navy and other similar
 stores) retailers each lost 1 point of wallet share.
     In addition, retailers' well-documented rush to jump start the holiday
 season by advertising heavily and lowering prices -- even before
 Thanksgiving -- had little influence over when consumers began their
 shopping, the survey said. Rittenhouse said: "The KPMG survey respondents
 said they shopped basically at the same time they do every year, and sales
 or early promotions did little to change their patterns."
     The survey, designed and managed by The Gordman Group, was conducted
 randomly by telephone with 815 shoppers. The margin of error is plus or
 minus 3.5 percent, at a 95 percent confidence level
     KPMG LLP, the audit, tax and advisory firm (, is the
 U.S. member firm of KPMG International. KPMG International's member firms
 have 123,000 professionals, including more than 6,800 partners, in 145
Contact: Robert Wade / Jennifer Hurson KPMG LLP Tel: 201-307-7482 / 201-307-8187 Email: /