For the first time, holiday season expenditure this year is predicted to not only recover but even exceed the levels witnessed before the pandemic strangled the global economy. Intriguingly, however, it is not presents that consumers are expected to spend on most in the lead-up to Christmas, a recent report from Deloitte suggested.
The final months of each year, namely November and December, are traditionally marked by consumers actively hunting through stores for deals and price cuts on seasonal goods, including gifts. These months provide a reliable measure of consumer spending power, carrying a crucial significance for retailers—it can account for over a fifth of their yearly sales.
As we edge closer to this year’s festive season, households have been cautious due to the strain on their finances resulting from persistent inflation and the recent resumption of student loan repayments. In stark contrast, findings from the 2023 Deloitte Holiday Retail Survey indicate that shoppers are keenly anticipating getting their holiday shopping started, perhaps even pampering themselves.
The survey, which gathered views from 4,330 consumers between August 30 to September 8, revealed that it is expected for consumers to spend an average of $1,652 on festive-related buying, marking a 14% rise from last year and exceeding an average of $1,496 from the year 2019.
Lupine Skelly, Deloitte’s retail research head, named three factors as the primary contributors of the probable surge in spending. A larger ratio of people celebrating the holiday season (95% as compared to 2022’s 92% and 2021’s 88%), a majority of consumers predicting inflated prices on holiday products, and middle to high-income families leading in spending.
Interestingly, this year’s consumer focus has been on non-gift items. As per Skelly, 82% of surveyed consumers suggested plans of spending on non-gift items such as decorations, a rise from 77% last year. While it still has not reached 2019’s 88%, the trend is showing growth this year.
While gift expenditure is still forecasted to rise by 9% compared to last year, consumers are planning to cut down on one gift compared to last year. Spending on non-gift articles like clothing, home furnishings, and decorations is projected to see a 25% increase over 2022.
Skelly further stated that the most notable increase in holiday spending was seen in the non-gift group. She suggested that due to the elevated price hikes seen in select product categories, consumers may prefer gifting gift cards.
Despite attempts from retailers to usher in the holiday shopping rush as early as October, Deloitte’s report found that about two-thirds of holiday shoppers intend to start hunting for deals post-Thanksgiving, starting on Black Friday and continuing onto Cyber Monday for online discounts.
