US consumers will purchase fewer gifts this holiday season as they contend with higher prices and weaker financial situations, according to a survey by Deloitte.
Americans will buy an average of nine presents for their loved ones this year, compared to 16 items in 2021, as household incomes reach their lowest level in a decade, the consulting firm noted last week. Some 37% of those surveyed reported their financial situation had dropped from the same period a year ago. However, in total, outlay on gifts, non-gift purchases and experiences will remain flat at $1,455, versus $1,463 last year.
“Consumers are feeling the pinch of higher prices,” Deloitte noted. “They may be spending the same amount overall, but they are not spending the same way. Looking for ways to outsmart inflation, non-gift purchases are being reined in. Consumers also plan to purchase fewer gifts while shifting more of their budget to gift cards. As a result, shopping will get wrapped up in a much shorter window.”
About half of those surveyed said they would spend approximately the same as last holiday season, while 26% planned to spend less and 22% planned to spend more. Consumers who expected to spend less or more than the previous year explained the change was due to higher costs of goods.
Gift cards are the only category that will see a rise in spending, up 7% year on year, according to respondents. Meanwhile, all other categories will fall compared to 2021. The clothing and accessories segment — which includes jewelry — is due to fall 14% but will still comprise the highest share of holiday spend at retail, with 77% of shoppers saying they will be buying from the category, Deloitte noted.
Approximately 38% of customers plan to start their shopping earlier this year amid concerns over inflation and stockouts. About a quarter of total holiday budgets will be spent by the end of October, versus 18% last year. Meanwhile, 34% will shop at online-only retailers, 15% at mass merchants, and 5% each at department stores and local independent shops, Deloitte added.