Santa Claus may have fewer presents down the chimney this year, Deloitte says, as inflation is expected to reshape consumer spending in the United States this holiday season.
The shift in spending habits comes amid tougher economic conditions, with more than a third of U.S. households responding that their financial situation is worse than a year ago, according to the Deloitte report, which surveyed nearly of 5,000 consumers online between September 6 and 14.
Holiday spending, at $1,455 per person, is expected to match 2021 levels, but consumers on average expect to buy nine gifts this year, up from 16 in 2021, and spend less on non-gift purchases.
“High prices have holiday shoppers prioritizing their purchases, but there are bright lights throughout the season,” said Nick Handrinos, vice president of Deloitte. “Low-income families are feeling more confident as the holidays approach, younger generations are embracing new retail formats and retailers are not anticipating the out-of-stock issues we experienced last year.
Low-income groups, people who earn less than $50,000 a year, plan to increase their spending by 25% from last year to an average of $671, Deloitte reported. Spending by high-income earners, who earn more than $100,000 a year, is expected to decline 7% as they cut big-ticket items like electronics.
Changing consumer spending and improved supply chain have left some retailers with excess inventory. As a result, retailers began offering discounted items earlier this year and 23% of consumers will spend their vacation budget by the end of October, Deloitte said.
Travel demand is also expected to slow as airfares soar and flight delays and cancellations weigh on plans. Only 31% of Americans plan to travel between Thanksgiving and mid-January, down from 42% last year.