A recent study found that holiday shoppers are expected to shop big this year, matching 2019 spending levels, despite moderate inflation, higher prices, and tighter budgets.
The study from Deloitte reveals that consumers are ready to bring on the holiday cheer, and are projected to spend 14% more year-over-year, with average spending reaching $1,652. This exceeds pre-pandemic spending for the first time. Overall, more consumers (95%) said they plan to shop this year compared to the 92% of consumers who said as much in 2022.
Both middle- and high-income groups plan to splurge this year. Among those in the $50,000 to $99,000 income group, Millennials are likely to spend an average of $1,949, an increase of 33% year-over-year.
For those making more than $200,000, Deloitte found that women are likely to spend 23% more than men.
While holiday spending is expected to increase, there is still a segment of the consumer base that will be cautious with their spending this year. Indeed, consumers saddled with student loan repayments will be tightening their purse strings this year, with 48% respondents saying that they will need to limit their holiday purchases, while slightly fewer (37%) also said they’ll need to cut back on non-holiday purchases.
Amid Inflation, Retailers Should Meet Consumers Where They Are
As consumers continue to battle with rising costs in consumer goods and groceries, the key for retailers to win this holiday season is to offer budget-conscious consumers the best bang for their buck. This means offering the best promotions and deals during the big holiday craze taking place during Black Friday and Cyber Monday, as 66% consumers have said they plan to shop then.
What’s more, time will be of the essence as holiday shoppers plan to wrap up their shopping sprees a little earlier this year, in 5.8 weeks, as opposed to 7.4 weeks, which was the average pre-pandemic.
More retailers are hoping that shoppers spend a little more this year and are leveraging various advertising channels to drive up sales. In its holiday sales and 2023 forecast, the National Retail Federation said they expect record level holiday spending during November and December, reaching between $957.3 billion and $966.6 billion—an anticipated growth between 3% and 4% compared to a year prior.