aNb Media News, January 4, 2011

Happy New Year! Safe travels to all as we start the 2011 trade show travel circuit. aNb Media will be at the toy fairs in Hong Kong, Nuremberg, and New York. We look forward to seeing everyone’s new lines for 2011.

Consumers to Receive More Money in Their Paychecks

Due to changes in the tax law for 2011, take-home pay for many workers is expected to increase by 2 percent on average in 2011. Consumers are unsure as to whether they will spend, save, or pay down debt with the extra money, a recent survey by the International Council of Shopping Centers and Goldman Sachs (ICSC-GS) has found.

“While economic theory generally posits that consumers will spend some of the money, theory and empirical evidence suggests that the consumers’ ‘propensity to spend’ from temporary disposable income will be smaller than if the reduction was permanent,” said Michael P. Niemira, ICSC’s vice-president for research and chief economist, in a statement released by the ICSC.

In fact, the ICSC-GS survey of 1,000 households, which was conducted by MarketTools Inc., found that 27 percent of consumers were unsure what they would do with the added disposable income while 26 percent reported that they were likely to use the money to pay down outstanding debt. A little over a fifth (22 percent) of consumers anticipated that they would likely save most of the money while a quarter of consumers reported they would likely spend some of it (16 percent) or most of it (9 percent).

President Barack Obama signed into law on December 17, 2010, the Tax Relief, Unemployment Insurance Authorization, and Job Creation Act of 2010, which included a one-year reduction in workers’ payroll tax. That provision of the tax legislation—which the White House estimated will affect 155 million workers—rolls back the Federal Insurance Contributions (or FICA) tax and Self-Employment Contributions (SECA) tax by two percentage points beginning on January 1 and running through December 31, 2011. The lower tax rate would boost take-home pay in 2011 by about $800 for individuals with an income of $40,000 per year, for example. Those who earn salaries of more than $106,800 would save a maximum of $2,136 on taxes. Cumulatively, this tax reduction will boost the consumers’ paychecks by approximately $112 billion over the course of 2011 before expiring at the end of the year, according to estimates from Congress’ Joint Committee on Taxation.

“By year-end 2011, ICSC expects that between $60–$85 billion of the extra take-home pay will enter the spending stream and provide an aggregate incremental lift to 2011 consumer spending of approximately one-half to three-quarters of a percentage point,” said Niemira in a statement released by the ICSC.

News and Notes from this Holiday Season

Retailers reported positive sales as the 2010 holiday season came to a close. Anecdotally, aNb Media staff reported crowded stores throughout the holiday season. Stores remained packed in the week between Christmas and the New Year in New York City—despite the blizzard on December 26 and 27.

MasterCard Advisors’ SpendingPulse, a macroeconomic report tracking national retail and services sales, provided initial summary results for the 2010 holiday shopping season. In the 50-day period, which is measured from November 5 through December 24, the data showed overall season-over-season growth of 5.5 percent (excluding auto) as consumer spending continued to show progress compared to the same period in 2009.

Here is what the survey found:

  • During the period October 31–December 24, U.S. consumers spent an estimated $36.4 billion online, a 15.4 percent year-on-year increase over the 2009 holiday season. There were six days during the 2010 season that surpassed $1 billion in online sales compared with three days in 2009. Top days included Tuesday November 30, which registered $1.16 billion in sales, and Wednesday December 1, registering $1.13 billion. The Monday after Thanksgiving (known as Cyber Monday) generated $999.3 million in sales, a 25.3 percent increase compared to the Monday after Thanksgiving in 2009.
  • Apparel was a strong category, growing 11.2 percent over the 2009 holiday season. Menswear reached double-digit growth coming in at 10.5 percent higher than in 2009. The women’s apparel category grew by 5.6 percent.
  • Electronics was one of the lagging performers, growing 1.2 percent season-over-season. The flat-to-modest growth rates could be due to the decline in TV prices.
  • Jewelry posted several weekly year-over-year increases and ended the season up 8.4 percent higher.

The National Retail Federation reported the following:
Best Holiday Commercials:
The National Retail Federation says that this year retailers’ holiday commercials focused on the funny and quirky rather than the sentimental. According to a Retail Advertising and Marketing Association survey, conducted by BIGresearch, Target (No. 1) took back the top spot from Walmart (No. 2) while Macy’s was listed as No. 3, using the celebrity appeal, jumping two spots higher this year.

Other companies in the top 10 included Best Buy (No. 4), Kmart (No. 5), Sears (No. 6), Old Navy (No. 7), Kohl’s (No. 8), JCPenney (No. 9) and Toys “R” Us (No. 10).

Favorite online holiday promotions include Amazon ranking as No. 1., Walmart as No. 2, Target as No. 4, and Kohl’s and Best Buy, which are tied at No. 5.

Gift Receipts:

  • According to the National Retail Federation, six out of 10 (60.7 percent) shoppers say they provide a gift receipt most or some of the time when giving a gift, up from 58.5 percent who said so last year and 56.9 percent in 2006.
  • While gift receipts are increasing in popularity, most won’t be used, as two-thirds (66.3 percent) of holiday shoppers say they didn’t return a single gift last holiday season.

Gift Cards:
According to NRF’s 2010 Gift Card Consumer Intentions and Actions survey, conducted by BIGresearch, Americans will spend an average of $145.61 on gift cards, up from $139.91 last year. Total gift card spending is expected to reach nearly $25 billion. Gift cards remain the most requested holiday gift for the fourth year in a row.

Most shoppers say they will give a gift card to a department store (39.2 percent) or restaurant (33.4 percent). However, others will consider book stores (23.7 percent), electronics stores (19 percent), entertainment venues such as the movies (14.1 percent) and even coffee shops (13.9 percent).

Cash vs. Credit
Americans were reporting that they planned to use their debit cards or cash for their holiday purchases and use of credit cards is expected to decrease. According to NRF’s 2010 Holiday Consumer Intentions and Actions survey, conducted by BIGresearch, more than four out of 10 (43 percent) holiday shoppers will rely on debit cards as a primary form of payment, a 20 percent increase from 2005’s 34.3 percent. Slightly more than a quarter (27.6 percent) of shoppers will charge their gifts—the lowest since 2002’s 26.8 percent—and 25.7 percent will use cash, up from 24.9 percent last year.

Hasbro Signs Deal with Italy’s Mediaset

Hasbro Studios, the LA-based production and distribution division of Hasbro, Inc., announced a programming agreement with Mediaset, Italy’s leading media group, to broadcast Transformers Prime, My Little Pony Friendship Is Magic, G.I. JOE Renegades, The Adventures of Chuck and Friends, and Pound Puppies on its multiple channels.

A significant component of the deal, which launches in the fourth quarter of 2011, will have Mediaset also serving as Hasbro’s exclusive licensing agent for merchandise in the Italian market. Additionally, the licensing deal will cover Hasbro’s Monopoly, Trivial Pursuit, and Littlest Pet Shop brands.