Rising negativity about the economy and their own personal finances is causing 29 percent of U.S. consumers to consider spending less this holiday season, according to a recent survey by The NPD Group, recently partnered with Information Resources, Inc. (IRI).
While the majority of shoppers plan to spend the same or more than last year, the proportion of consumers planning to spend less this year has increased compared to last year. As a result, during the traditional Christmas shopping season in November and December, spending is expected to be at 2021 levels, with potential growth of 0.5 to 2.5 percent if the season extends to October and January.
“Consumers are ready to look beyond the 2022 holiday season and celebrate, but last year’s optimism has taken a hit as financial concerns make them feel a little more grouchy this year,” said Marshal Cohen, chief retail industry advisor for NPD . “Despite economic challenges, consumers still have just as many friends and family to shop for during the holiday season, they will just spend differently.”
Financial worries cast a shadow over the holiday season as dwindling pandemic worries open the door to more gatherings.
- One in five (20 percent) Christmas shoppers say they will spend less over the holidays because their economic situation has changed.
- More than one in ten (12 percent) consumers will spend less on gifts so they can spend more on holiday entertainment-related expenses such as food, drink and decor.
- Over half (52%) of consumers are less concerned about COVID-19 than they were a year ago (up from 32% in 2021).
- More than half (55 percent) of consumers plan to go home to a friend or family member for the holidays (up from 47 percent in 2021).
This holiday season is defined by changes in when, where and how consumers shop.
- More “early” pre-Thanksgiving shoppers are starting even earlier — 39 percent started or plan to start before October.
- The number of consumers wanting to do some holiday shopping online has fallen from 85 percent last year to 80 percent this year – the biggest shift in favor of stores in years.
- Plans to shop at bulk retailers grew the most as of 2021, while plans for e-commerce-only shopping declined the most.
- Consumers expect to do more of their holiday shopping in stores (46 percent) than online (45 percent) this year — another notable shift from last year’s plan to do half of their shopping online.
- Among those planning to use social media to search for holiday shopping, TikTok is the only one in the top 4 that is growing.
“Pre-season promotional events will help consumers spread their spending while setting the stage for an extended holiday shopping season,” said Cohen. “Managing this year’s erratic shopping dynamics will require patience and perseverance with the consumer, as well as a perspective on the holiday season that goes beyond traditional retail definition.”