Inflation is weighing on the holidays this year.
About half of shoppers will buy fewer things due to higher prices, and more than a third said they would rely on coupons to cut costs, according to a recent survey of more than 1,000 American adults. RetailMeNot.
Although research shows that many consumers also desire a Start seasonal shopping soonThat increase was largely driven by concerns about affordability and money-saving strategies, other reports show.
“Inflation has, by far, been the biggest issue for households this year,” said Tim Quinlan, senior economist at Wells Fargo and author of the 2022 holiday revenue report.
Household finances are affected with lower savings rates and real wage reductionthis could slow down sales during the holiday season, Quinlan said.
“The bottom line is, with inflation continuing to be a headache, the dollar won’t go far and most consumers will still be looking for bargains,” Quinlan said.
A separate BlackFriday.com report also found that 70% of shoppers will consider inflation when shopping this holiday season, and even more will mind deals.
About 25% of consumers said they would choose the cheaper version or more practical gifts, such as a gas card, according to TransUnion’s holiday shopping survey.
“People are trying to save and make the most of what they have,” Cecilia Seiden, TransUnion’s vice president of retail sales.
However, the average household will shell out $1,455 on holiday gifts, in line with last year, a separate Deloitte retail report found.
Shoppers at the Willow Grove Park Shopping Center in Willow Grove, Pennsylvania, on November 14, 2020.
Mark Makela | Reuters
Natalia Brown, Director of Customer Operations for National Debt Relief, warns: “Remember not to go into debt when shopping on holiday. “Debt prevents people from achieving their financial goals — like building an emergency fund, buying a home, and saving for retirement.”
Holiday spending can come with a higher cost if it means taking on more credit card debt like Federal Reserve raises interest rates to slow inflationQuinlan added.
The average annual percentage is now close to 19%, the highest of all timeaccording to Ted Rossman, a senior industry analyst at CreditCards.com.
That will make consumers worse off entering 2023, Quinlan explained.
“In many ways, we consider this year’s holiday shopping season to be the last hurdle,” he said.