Americans are putting a bow on their troubles, and wrapping up their cares and woes.
In fact, they appear to be quite enthusiastic about the upcoming holiday season, despite stagnant wages, rising inflation and the ever-looming threat of recession, according to a survey by TransUnion
the consumer credit-reporting agency, released Thursday.
Indeed, shoppers told TransUnion they are getting more realistic about their gift-giving in an effort to cope with rising prices. The researchers said these changes to shopping behavior were particularly pronounced among low-income consumers.
Here’s how holiday shoppers aim to fight inflation:
• A third of consumers said they plan to buy fewer gifts.
• 17% said they plan to buy cheaper versions of gifts.
• 13% are turning to more practical gifts such as gas cards.
• 12% will buy the same amount of gifts and may spend more.
“Though budgets were mostly flat or increasing, consumers across all generations were still having to make adjustments to their holiday shopping in order to stretch their budgets,” the report said.
Both millennials and baby boomers planned to do more spending this year, the researchers said. Baby boomers were likely big spenders due to the presence of grandchildren, they added.
The TransUnion survey was carried out online among 3,000 adults, and was conducted Aug. 11-18.
The Consumer Price Index rose 8.2% in September compared to a year ago. With bills on groceries and essentials such as gas and electricity on the rise, many Americans are cutting back on spending.
Lower-income households told MarketWatch they are changing their eating habits, and even delaying their utility payment in order to buy food.
“Despite documented concerns over inflation and possible recession, consumers appear to be very excited for this year’s holiday shopping season,” said Mark Rose, senior director of TransUnion’s retail business.
Retail sales last November and December hit a record $886.7 billion, according to the National Retail Federation. The trade association hasn’t released its 2022 holiday-shopping projections yet, but there’s early indication that people are keen on deals.
There are some early clues shoppers could be toning down spending and turning up the bargain hunt. Online holiday sales are projected to rise 2.5% to $209.7 billion this year, said Adobe
That’s the slowest growth rate since 2012 and pales compared to the 8.6% increase in online holiday sales last year.
Other days when consumers may be able to buck those higher prices, at least on some items. The biggest discounts are expected to hit between Thanksgiving and Cyber Monday, Adobe said. Thanksgiving Day (Nov. 24) will be the best day to shop for electronics. Black Friday (Nov. 25) will have the biggest discounts for TVs.
The Saturday after Thanksgiving (Nov. 26) will have the biggest discounts for toys, with the biggest deals for apparel and sporting goods on Sunday (Nov. 27), and the best computer and furniture deals on Cyber Monday (Nov. 28).
Sales at retailers fell flat in September, the government said Friday, another sign that the economy is likely to slow in the coming months as interest rates rise and consumers pull back on spending. But they rose 8.2% on the year.
With inflation at a 40-year high, 47% of consumers said they are worried about their finances this holiday season, according to a separate report from Morning Consult’s Holiday Report.
Over 80% of consumers reported they were no less enthusiastic about this year’s holiday-shopping season. Some 23% of all consumers said they were in higher spirits than last year.
Among those who expressed excitement about shopping for gifts this year, 35% said they were in a better financial position, 27% said they couldn’t wait to get back to normalcy — and Christmas cheer is one way of doing that — and 21% said the holiday season helps take their mind off the news.
“While some consumers may end up spending more on their holiday shopping simply because of higher costs for many goods and services, there’s good evidence that consumer optimism is intact,” TransUnion’s Rose said. “This is a result of increased incomes and a continued strong employment picture.”