Consumers Cautious Entering Holiday Spending Season

Survey: US Consumers Set to Spend $613 on Gifts this Season—Down Considerably from Last Year

 Amid a year of economic uncertainty and high inflation, Americans appear to be approaching this holiday season somewhat cautiously. According to its Holiday Spending Survey, The Conference Board finds that US consumers intend to spend an average of $613 on holiday gifts this year, down from $648 last year. By contrast, consumers expect to spend more on related non-gifts items this year—$393 compared to $374 last year. This reflects high inflation and surging food prices in particular, which may be limiting spending on gifts.

Total overall spending is down slightly from 2021 levels and purchasing patterns are shifting

Gift giving: The $613 consumers plan to spend on gifts in 2022 is down from the $648 they intended to spend last year:

• Gift cards are set to see the biggest spending increase, followed by Toys & Games and Vacation & Travel.

• Home Décor, Furniture, Appliances are forecast to see the largest decline, followed by Jewelry & Accessories and Tools & Hardware.

Non-gift holiday items—such as food, decorations, and wrapping paper: The $393 consumers plan to spend on non-gift items in 2022 is up from their intended spend of $374 last year.  

These changes likely reflect the uncertain economic outlook, rising prices—in particular food and gas–and consumers’ shift away from durables to services as pandemic behaviors abate. About 6 in 10 expect to pay more for gifts and food.

“Consumers are entering the holidays in a somewhat cautious mood this year,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “The Conference Board Consumer Confidence Index® decreased in October, after back-back-back monthly gains, as economic uncertainty and inflation continue to afflict consumers. Consumers appear to be rebalancing their budgets and priorities by reducing their gift-giving circles to help offset the higher costs of non-gift items, in particular food. Given this challenging landscape, retailers have already begun countering by offering shoppers earlier than usual discounts, sales, and incentives.”

Holiday Travel—and a Return to the Mall

Consumers have returned to pre-pandemic norms in how they plan to spend their holidays and where they plan to make their purchases:

• Back to the mall: Just 39% of consumers intend to make at least half of their gift purchases online this year—down from 52% in 2020, and the first back-to-back annual decline recorded.
• Holiday travel plans: 30% plan on traveling away from home this holiday season, about the same last year. Of those, 47% intend to drive, with slightly less—43%—choosing to fly.

Source: The Conference Board Consumer Confidence Survey®, October 2022

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