Consumers still cautious about holiday shopping in 2010: NPD

Despite having strong sales on Black Friday, most consumers are still being cautious about holiday spending, with the majority of them saying they plan to spend about the same as last year, according to a report by NPD Group.

About 61 percent of the people, up 2 points from last year, expect to spend the same, while one-third say they plan to spend less, the survey reported.

Only about 9 percent of the group plan to spend more, it added.

Black Friday, which is one of the biggest holiday sales period, reported a marginal rise of 0.3 percent this year, but it netted retailers over $10.69 billion, according to ShopperTrak.

Online sales rose 12 percent from last year for the first 35 days of the November-December holiday shopping season, according to information from comScore.

However, many people still remain wary about loosening those purse strings, particularly in the light of an uncertain job market. Most retailers like Wal-Mart, Best Buy and Target are offering lucrative online deals to lure people who are reluctant to shop.

We are seeing what I call 'calculated consumption,' and I believe that it is a consumer mind-set that will be around after holiday shopping is over, Marshal Cohen, the chief industry analyst at NPD Group said.

Most of the holiday shopping occur during the Black Friday or the Cyber Monday season, when people try to take advantage of the massive discounts to get gift shopping out of the way. Many consumers are also doing a lot more research before shopping this holiday season.

Various apps on the iPhone and other smartphones are helping people find and pick the best deals in the best regions.

Video games topped the list of gifts this year, as sales jumped 8 percent in November, another report by NPD said.

Even so, sales remain about 5 percent below the year to Nov, compared with the year-ago period and it is expected to range between $18.8 billion and $19.6 billion for the year, which would almost be flat with last year's sales.

Microsoft's Xbox 360 Kinect topped gift list this season, which had sold 2.5 million units it its first 25 days on the market.

This was definitely good news for the video game industry, that was hit hard during the recession as more people switched to online games or bought used games last year.

Clothes, however, continue to top the gift list in 2010, followed by toys and movies. Books and electronics are the fourth most highlighted item on the gift list.

Consumers are also shying away from using their plastic this season. Many are still pay off debts they incurred over the past few years. The November-December period, the peak holiday season is when many heat up their credit cards.

Some people are shunning credit cards for budgeting reasons, while others do not have a choice, The New York Times reported.

More than 15 million Americans lost their credit cards because of tighter credit card regulations that were past last year, or when issuers cut back on credit during the recession, the report said.

Retailers are still trying hard for people to spend this season.

Citibank is giving Dividend cardholders 5 percent back on spending at department, clothing and electronics stores through Dec. 31. Target is giving its cardholders a 5 percent discount on purchases, Neiman Marcus is advertising extra rewards points on most purchases on certain days this month, and Sears has been running a variety of no-payment, no-interest offers on its credit cards throughout the holidays, the NYTimes reported.