More than a third of holiday shoppers' will spend less this year than in 2023
On the other side, 24% of Americans plan on spending more than they did in 2023
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Americans are already thinking about the holidays and how they intend spend money this year, and for many it means spending less, according to Bankrate.
In a recently-published survey of 2,300 U.S. adults, Bankrate said it found 33% of holiday shoppers reported they planned to not spend as much this year as 2023.
Consumer caution around spending and credit cards could be driving that, according to H Squared Research chief research officer Hitha Herzog.
For its report, WalletHub analyzed almost 5,000 deals from the Black Friday ad scans of 21 of the largest retailers in the U.S. (iStock) (iStock / iStock)
"There’s a real convergence of shoppers who have in the past spent a lot on their credit cards and really leaned on credit card debt to take them through the holiday season. Now that interest rates are, you know, there’s talk that they’re going to come down, but they haven’t come down to a point where consumers really feel good about amassing a lot of debt on their credit card. They are now wanting to cut back a little bit more," she told FOX Business.
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Interest rates have been elevated as the Federal Reserve seeks to curb inflation. The Consumer Price Index, a measure of inflation, rose 0.2% month-over-month and 2.9% year-over-year in July.
Inflation is expected to "change the way I shop" this year for 34% of holiday shoppers, according to Bankrate. Other survey data points about potential budget strain and their feelings about holiday shopping costs indicated some Americans are feeling anxiety about their wallets for the season.
Bankrate also found that, on the flip-side to those expecting to open their wallets less, 24% of holiday shoppers think they will splash out more on purchases. Another 43% see their purchases staying the same during the 2024 holiday shopping season, the survey said.
"With the consumer, there’s a real bifurcation, meaning there’s a delineation – and I think it’s always been there with the consumer – of people who are very conscious of how they spend and they want to make sure they’re staying in their budgets and they start shopping early to take advantage of sales and they’re very price sensitive. And then there are consumers who are not price sensitive," Herzog told FOX Business.
The share expecting their holiday spending to go up or stay flat "are probably the people who are on the other side of the delineation where they are not price sensitive" and are still spending regardless of prices, she said.
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Doing holiday shopping online appeared poised to be the more common route among respondents, with 42% reporting they’d use the internet for "most" of their purchases and 23% saying in-store.
Hand holding smart phone with black friday sale on screen device over blur store background, business and technology, online shopping, digital marketing concept (iStock / iStock)
Conveniences associated with online shopping such as free shipping and easy returns have contributed to the method seeing an increase in popularity since COVID, according to Herzog.
While making purchases, more than half of holiday shoppers will charge their debit card this year. That method topped the 48% who plan to use cash, 53% turning to credit cards, 11% taking advantage of buy now pay later programs and 4% writing checks, according to Bankrate.
Some (27%) anticipate they will see themselves wrack up debt.
For timelines of when consumers were looking to start their holiday shopping, there was some variation. However, Bankrate reported 48% were aiming to get the ball rolling by Halloween, a trend that Herzog linked to the "Christmas Creep."
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"This is something that marketers have seen over the past couple years, where promotions get earlier and earlier. We saw the first promotions during Amazon Prime week, and then you see these promotions continue," she explained. "Before, you had the promotions of Black Friday in an effort to kind of push retailers over the finish line and end the year and the quarter in the black. Now, retailers are really getting on board with the consumer wanting to just get everything done before the craziness happens."
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During the holiday period spanning November through December last year, there was $964.4 billion worth of core retail sales, the National Retail Federation reported.