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- Americans are preparing to spend money this holiday season at a rate exceeding pre-pandemic levels.
- Prices for many popular gifts are expected to be lower than they were in 2022, thanks to record discounts.
- Despite lingering concerns about the economy, the consumer continues to show their resilience.
Despite some strong signals, most Americans still don't feel great about the economy. And yet, there are also some promising signs that consumers are ready to splurge on deals this holiday season.
A new Deloitte survey shows that Americans are preparing to spend money this holiday season at a rate exceeding pre-pandemic levels. Meanwhile, there are signs that shoppers will get more bang for those extra bucks as many common holiday items are cheaper this year despite sticky inflation.
In Deloitte's survey of 4,318 consumers in late August and early September, it found that 95% of Americans plan to participate in holiday shopping, up from 92% a year ago and 88% in 2021. That is also much closer to the pre-pandemic level of 97% in 2019.
Deloitte also found that the people surveyed plan to spend $1,652 this holiday season, up 14% from last year and 10% from the pre-pandemic level of $1,496 in 2019.
Survey respondents expect to spend $156 more this year compared to 2019. Nearly all of that is expected to come on the two biggest shopping days of the year, with spending around Black Friday and Cyber Monday expected to go up an additional $152.
However, this is only half of the story. While consumers are prepared to spend more, they are also going to find better deals.
Shoppers may be in for a pleasant surprise
While Deloitte's survey found that 72% of respondents expect higher prices due to inflation this year, that may not be the case.
According to a new report from Adobe, which tracks online sales, retailers will have record-high discounts for many common categories of gifts, especially around Black Friday and Cyber Monday. Many categories are expected to see unprecedented average discounts of as much as 35% for categories such as toys, electronics, apparel, sporting goods, TVs, appliances, and furniture.
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The steeper discounts will mean that prices for many products will be cheaper this year compared to last year's holiday season, according to the Wall Street Journal. For example, smartphones will cost 12% less on average, and TVs will cost 9% less.
However, one area where shoppers plan to pull back is food and beverage gifts. Based on total expected spending in the Deloitte survey, food and beverage ranked third in 2022, behind only gift cards and clothing, including accessories. This year, food and beverage is ranked fifth, falling behind toys and electronics.
While pricing pressures may be easing in some areas, food costs have been especially hard on consumers, which might still be fresh in their minds.
Despite lingering concerns about the economy, the Deloitte survey and Adobe report paint a picture of continued consumer resilience. As retailers look to give shoppers more incentives with record discounts, the opportunity for significant savings suggests we could be in for a bigger gift-receiving season than maybe we were expecting.