Families don’t like to skimp on vacations, no matter the conditions.
But with prices rising and fears of a recession, holiday shoppers are feeling less generous this season.
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Many consumers plan to shop less — and at a discount, according to a recent Deloitte holiday retail report.
Still, households will shell out an average of $1,455 in holiday gifts, similar to last year, according to the report.
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Even though some consumers may end up spending as much or more than they did in 2021, this is largely due to higher prices, other reports also show.
“Inflation is, by far, the biggest problem for households this year,” said Tim Quinlan, senior economist at Wells Fargo and author of its 2022 holiday sales report.
Household finances have taken a hit with a lower savings rate and decline in real wageswhich could slow holiday sales, Quinlan said in the report.
“At the end of the day, with inflation still a headache, the dollars don’t stretch that far and most consumers will still be looking for bargains.”
The dollars don’t stretch that far, and most consumers will still be looking for bargains.
Tim Quinlan
senior economist at Wells Fargo
A separate report from BlackFriday.com revealed that 70% of shoppers will consider inflation when shopping this holiday season and even more will be on the lookout for deals.
Nearly 33% of shoppers also plan to buy fewer freebies this year, while around a quarter said they would opt for cheaper versions or more convenient freebies, such as gas cards, according to the report. TransUnion survey of holiday shopping.
“People are trying to economize and make the most of what they have,” said Cecilia Seiden, vice president of retail for TransUnion.
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“Remember not to go into debt for your holiday shopping,” warned Natalia Brown, client operations manager at National Debt Relief. “Debt prevents people from achieving their financial goals, such as building an emergency fund, buying a home and saving for retirement.”
Vacation spending could come at a higher cost if it means taking on more credit card debt just as the Federal Reserve is raising interest rates to curb inflation, Quinlan added.
The annual percentages are currently close to 18%, on average, but could be closer to 19% by the end of the year, which would be an absolute recordaccording to Ted Rossman, senior industry analyst at CreditCards.com.
This will make things worse for consumers heading into 2023, Quinlan said. “In many ways, we consider this year’s holiday shopping season to be the last hurray.”