Consumers Expect to Spend Less on Holiday Items in 2023 (2024)
According to The Conference Board Holiday Spending Survey, US consumers plan to spend an average of $985 on holiday-related items in 2023, less than the $1,006 reported in 2022. As part of this total, consumers intend to spend an average of $654 on holiday gifts, up 6.7% from $613 last year. By contrast, consumers expect to spend much less on holiday-related non-gift items this year—only $330 compared to $393 in 2022, a 16% decline.
“October’s Consumer Confidence Index® suggests Americans are entering the holiday season in a somewhat cautious mood, with the overall, present situation, and expectations indexes all seeing dips,” said Dana M. Peterson, Chief Economist at The Conference Board. “The softening in confidence may have affected overall holiday spending plans. Planned spending on non-gift items fell materially this year. Notably, food—a common non-gift holiday item—is expected to cost more this year compared to last, which may have lowered consumers’ desire to purchase non-gift items. However, consumers still seem to want to engage in some holiday cheer, as reflected in a rebound in gift spending after last year’s slump. The uptick in intended gift-giving is despite consumers’ expectation of higher costs for such items.”
Peterson added: “Consumers under 45 years of age are planning to spend less on gifts this year compared to last, while consumers 45 and older expect to spend more. Slightly more consumers plan to purchase the majority of their gifts online compared to last year. Among gift categories, consumers are more likely to purchase gift cards, vacation and travel, and toys and games. Home décor, beauty products, and books/music/DVDs are less popular gifts compared to last year. Few consumers plan to travel for the holidays, but if they do, it will be by automobile.”
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Holiday Spending Survey, US consumers plan to spend an average of $985 on holiday-related items in 2023, less than the $1,006 reported in 2022. As part of this total, consumers intend to spend an average of $654 on holiday gifts, up 6.7% from $613 last year.
Retail spending in the 2023 holiday season rose just over 3% year-over-year, marking a return to pre-pandemic consumer spending trends even as credit card debt is on the rise and federal student loan payments have kicked back in.
The 2023 holiday sales results top the previous record of $929.5 billion spent during the 2022 holiday season. NRF had forecast that 2023 holiday sales would increase between 3% and 4% over 2022 to between $957.3 billion and $966.6 billion.
Personal outlays—the sum of personal consumption expenditures (PCE), personal interest payments, and personal current transfer payments—increased $134.7 billion (0.7 percent) and consumer spending increased $133.9 billion (0.7 percent).
New Bankrate data shows that about three of those holiday shoppers (33 percent) plan to spend less on holiday shopping this year than they did last year. Between two and three of the shoppers (24 percent) plan to spend more, and around four shoppers (43 percent) plan to spend about the same.
And the rate of growth in spending has moderated from the last couple of years. In 2022, retail sales during the holiday season increased 5.4 percent, according to the National Retail Federation. In 2021, they rose 12.7 percent, the largest percentage increase in at least 20 years.
Total nominal Bain-defined retail sales grew 3.8% year over year this holiday season (November and December), close to our forecast of 3.0% growth but below the 10-year average of 5.1%.
Citing continued inflation and high interest rates, 33% of consumers say they will spend less this year on holiday shopping than in 2023, per a new report from Bankrate. Just 24% of shoppers surveyed said they would spend more this holiday season, while 43% will spend about the same.
Some are more optimistic, expecting sales growth of 25% to 49%, or 50% to 74% during the holidays (7.69% selected each). On the flip side, 7.69% expect sales to decrease year over year during the holidays, down 11% to 24%, or down 25% to 49%. Just 15.38% project their online holiday sales in 2024 to be flat.
US consumers are purchasing fewer items across categories, reflecting subtle shifts in shopping behavior with meaningful consequences for consumer-packaged-goods players. Despite a relatively strong economy and low unemployment, consumers are buying fewer items—and spending more to do so.
Although inflation has slowed, nearly one third (30%) of respondents have been cutting back spending due to concerns about the economy and over two in five (42%) of respondents have altered their financial priorities over the past year.
He said consumer spending is doing better than many CEOs and market watchers expected by now. “You can call that a slowdown if you want,” he said. “It's probably the economy is normalizing out after, I'd say three to four years of historic volatility, especially since the onset of the pandemic in 2020.”
In 2022, Statista reported that 85 percent of people in the United States stated they were joining in the festivities. That percentage is down from 2019 when Gallup reported that 93 percent of Americans said they celebrate Christmas.
Dads are, by several leagues, the hardest people on Earth to buy Christmas presents for. This is admittedly a very broad-strokes characterisation, but in my experience dads just go and buy things that they want because they lack the patience to wait and receive them as gifts.
Winter clothing, electronics, holiday decorations, fitness products, and toys typically go on sale after Christmas. You can also find discounts on food, such as holiday candy and baked goods.
Holiday spending is expected to continue climbing in 2023. Americans are individually expected to spend about $1,000 across gifts, decorations, food and other holiday spending. Unsurprisingly, gifts typically make up the majority of Christmas spending, at $648 per person.
Compared to December 2022 CPI inflation, CPI inflation fell by 3.1 percentage points, from 6.5 percent in December 2022 to 3.4 in December 2023. Core inflation, which leaves out volatile food and energy prices, came in at 3.9 percent this year, down 1.8 points from its 12-month Dec 2022 rate of 5.7 percent.
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