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Company Gifts Still More Scrooge Than Santa

BOSTON ( TheStreet) -- 'Tis the season for fruit baskets, cheese trays and logo-emblazoned tchotchkes.

A bellwether of the economy comes each holiday season when companies decide how much they allocate to gifts for clients, vendors prospects and employees. Holiday parties, bonuses and other seasonal boosts to worker morale are also part of the end-of-year spending plan.

Is Scrooge back on the sidelines? Not just yet, perhaps.

Corporate gifts are becoming more creative and expensive than the usual fruit basket, experts say, but haven't returned to numbers seen before the recession.

A recent survey of its membership by the Advertising Specialty Institute, which represents 26,000 sellers and suppliers, found that nearly six out of 10 respondents said they plan to spend about the same as last year on corporate gifts for employees and prospects or clients. Nearly one-third (31%) plan to spend less, and only 12% plan to spend more, a net decrease.

Small-business owners have their own outlook on gifting.

Research by American Express (AXP - Get Report) found that 44% of small-business owners will be giving their customers gifts this holiday season, down 3% from last year. The mean price of customer holiday gifts, however, is $740, up from $455 last year.

"It is undeniably a really challenging time still for a lot of companies," says Alice Bredin, small-business adviser to American Express OPEN. "Business owners feel this year, maybe more than in other years, the importance of thanking customers and making sure they really feel appreciated. This is not a time where anyone wants to lose a customer, and the competition is really fierce for all those buyers out there. So if you have a customer, you want to make sure you are really thanking them."

"In small companies, business owners really do understand the value that each and every customer brings to their success," she adds. "Thanking those customers is something that has always been really important to them."

Overall, gourmet foods and wine continue to represent about a third of the business gift market. According to market research firm Packaged Facts, about $2.7 billion worth of food was presented as corporate gifts last year, a 3.8% increase from 2007.
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