Americans expected to smash holiday spending records, Gen Z less likely to splurge
Many American consumers are taking the economy and geopolitical issues into account when shopping this holiday season
Americans expected to smash holiday spending records, Gen Z less likely to splurge
Gen Z shoppers are the least likely to splurge this holiday season, but many say the economy is to blame.
Holiday sales are expected to increase 3% to 4% this year when compared to last Christmas, but with uncertainty in the U.S. economy, most shoppers say they’re looking for better prices and promotions.
Americans will spend billions this holiday season, according to the National Retail Federation (NRF), and the shopping has already begun at the Mall of America in Bloomington, Minnesota.
"Even though it’s not Black Friday, we have seen great deals. Actually, we spent more than we were planning to," said Ramiro Avila, of Eau Claire, Wisconsin.
McKinsey and Company’s latest consumer pulse survey found that this year’s holiday shopping season started earlier and will last longer than it did in 2022. Many shoppers started receiving holiday promotional ads in September, which is a tactic retailers use to attract consumers to spend earlier in the season.
SURVEY: MANY HOLIDAY SHOPPERS ANTICIPATE GIFT SPENDING WILL BE EQUAL OR EXCEED LAST YEAR
Retailers started sending out holiday promotion ads in September. With longer promotional windows, retailers hope to draw more consumers' attention. (Mills Hayes/Fox News / Fox News)
Despite deals starting early, the Mall of America is still preparing for Black Friday and the mall has already set up barriers to corral the people waiting in line.
"Last year, we had over 10,000 shoppers within the first hour, so we’re expecting great numbers this year," said Jill Renslow, the executive vice president of business development and marketing at the Mall of America.
Renslow says the mall conducted its own survey of 2,500 shoppers and found about half were in the same spending range as last year. However, shoppers are showing some concern over the economy and most people were looking to buy mostly apparel, shoes, toys and tech gifts for kids.
US CONSUMER SPENDING OVER THANKSGIVING WEEKEND EXPECTED TO REACH $130 BILLION
The NRF said 182 million people are expected to shop in stores and online from Thanksgiving to Cyber Monday, which is 15.7 million more people than last year.
The organization's survey found that nearly 60% of shoppers started browsing and buying for the holiday as of early November, but that won't deter the 74% who plan to shop during the Thanksgiving holiday weekend.
"It gets harder and harder every year to find different and unique stuff for people that they don’t already have," said Cathy Wyatt, who searched the mall on Wednesday for gift inspiration. She said she is considering hitting the stores again on Black Friday if the weather is good.
The NRF discovered that nearly 74% of people surveyed plan to shop during the Thanksgiving holiday weekend this year, and many are doing so to look for good deals. (Mills Hayes/Fox News / Fox News)
McKinsey and Company surveyed shoppers and found that about 80% of people plan to wait for better deals or find a cheaper option for gifts this year.
"They’re still shopping, demand is still there, but consumers are definitely spending with more caution than last year and what we saw is that they are less inclined to splurge," said Kelsey Robinson, a senior partner at the company.
McKinsey's consumer pulse survey found that most Americans don’t intend to splurge on gifts this year and people 26 years old and younger – Gen Z – are the least likely to splurge.
"I’m one year out of college and it’s been a lot more frugality, especially my rent cost has gone way up," Michael Groves, 22, said. "Some of my fun money that I usually had in my budget. I’m more trying to save that in case something is coming up."
GIFTS FOR THE HOLIDAYS: HOW TO PLAN AND SHOP WISELY THIS SEASON AMID INFLATION
Other Gen Z shoppers said they are still spending a lot of money.
"I’ve done some online shopping for my mom," said 21-year-old Lwazi Masondo, who is from South Africa. He said he still needs to shop for his siblings and dad, and he also hopes to do a little more shopping for himself. (Mills Hayes/Fox News / Fox News)
"I already got stuff for my girlfriend. I’ve spent a bunch already, $250 to $300," Camden Rhodes, 18, said.
Gen Z shoppers reported in the McKinsey survey that quality is slightly more important than quantity. Anjolie Moughan, who is also 18, finds that to be true while shopping for her college roommates and friends.
"Of course, I don’t want it to be expensive, but price isn’t really the most important thing right now. It’s mostly personalized gifts," Moughan said.
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Gen Z shoppers are also two times more likely to use "buy now, pay later" plans than other generations. All consumers still prefer to use credit cards despite most being in better financial positions than before the pandemic, according to the McKinsey survey.