29% of Consumers Cite Finances and Economy as Reasons For Spending Less During the Holidays, Reports NPD
Expect 2022 holiday sales to reach last year’s levels, but with a larger emphasis on in-store shopping
Increased negativity about the economy and their own personal finances is causing 29% of U.S. consumers to think about spending less this holiday season, according to a recent holiday purchase intentions consumer survey from The NPD Group, which recently merged with Information Resources, Inc. (IRI). While the majority of shoppers plan on spending the same or more than last year, the share of consumers who plan to spend less this year increased over last year. As a result, spending on par with 2021 levels is expected during the traditional November and December holiday shopping season, with the potential of 0.5% to 2.5% growth when the season is expanded to include October and January.
“Consumers are ready to get out and celebrate over the 2022 holiday season, but last year’s optimism has taken a beating as financial concerns have them feeling a bit more grinchy this year,” said Marshal Cohen, chief retail industry advisor for NPD. “Despite economic challenges, consumers still have just as many friends and family members to shop for during the holidays, they will just be spending differently.”
Financial concerns cast a shadow over holiday shopping as fading pandemic concerns open the door to more gatherings.
- One in five (20%) holiday shoppers say they will spend less over the holidays because their economic situation has changed.
- More than one in ten (12%) consumers will be spending less on gifts so they can spend more on holiday entertaining-related expenses, like food, drink, and decorations.
- Over half (52%) of consumers are less concerned about COVID-19 compared to a year ago (up from 32% in 2021).
- More than half (55%) of consumers are planning to go to a friend or family member’s home for the holidays (up from 47% in 2021).
This holiday season will be defined by changes to when, where, and how consumers shop.
- More “early” pre-Thanksgiving shoppers are starting even earlier – 39% started or plan to have started before October.
- The number of consumers planning to do holiday shopping online fell from 85% last year to 80% this year – the largest shift favoring stores in years.
- Plans to shop mass merchants grew the most from 2021, while plans for pureplay ecommerce shopping declined most.
- Consumers expect more of their holiday purchases to be made in-stores (46%) than online (45%) this year – another significant shift from last year’s plan for half of their shopping to be done online.
- Among those who plan to use social media for holiday shopping research, TikTok is the only one of the top four to grow.
“Early season promotional events will help consumers to spread out their spending, while also setting the stage for a more spread-out holiday shopping season,” Cohen said. “Navigating this year’s fluctuating shopping dynamics will require patience and persistence with the consumer, and a perspective on the holiday season that extends beyond the traditional retail definition.”