Consumer Behavior

Consumers back in the spirit of spending

Photo: Adobe Stock

November 6, 2023

Shopping trends are returning to pre-pandemic norms as holiday spend is projected to surpass pre-pandeic levels for the first time, according to Deloitte's 38th annual Holiday Retail Survey, which examined consumer behavior and sentiment ahead of the holiday shopping season.

The survey revealed consumers plan to spend an average of $1,652, up 14% over last year, and nearly one-third of holiday budgets will be spent in the last two weeks of November, according to a press release on the findings.

Additional findings include:

• 95% of consumers are planning to participate in the holiday season, up from 92% in 2022 and 88% in 2021, marking a return to pre-pandemic shopping behaviors. Further, all income groups are planning to spend more this year; middle-income groups intend to spend 26% more year-over-year.
• To economize, shoppers are budgeting for fewer gifts (eight versus nine last year), spending more on gift cards ($300 versus $217 in 2022) and seeking out deals (66% plan to shop Black Friday – Cyber Monday versus 49% in 2022).
• Gift cards gained ground on other gift categories perceived as having higher prices, like apparel and food and beverage. The average consumer plans to spend $300 on gift cards, up from $217 in 2022. Consumers may see gift cards as a potential way to get ahead of or to hedge inflation.
• Nearly 30% of shoppers will be responsible for almost 70% of the holiday spending this year, spending an expected average of $2,146 or more this season. These high spenders are focused on high-quality products, while other shoppers focus on getting a great deal.
• Three-quarters (75%) of consumers are tempted to buy a gift for themselves, mainly if it is practical or useful. However, 53% say they will reduce self-gifting to preserve their budget.
• Shoppers who prefer to shop for sustainable gifts spend 29% more on average than those who do not. Over half (55%) of younger shoppers plan to purchase sustainable gifts, up from 48% in 2022, compared with only 35% of older generations.
• Student loan repayments are expected to have a minimal impact. While 17% of consumers surveyed have student loan payments resuming this fall, less than half (48%) plan to cut back on holiday expenditures, and one-third (32%) do not expect to change their holiday plans.

Deloitte surveyed 4,330 U.S. consumers and also polled 43 retail executives across categories, 93% of which have annual revenues of $1 billion or more.

"Although inflation shows signs of moderating, consumers have come to expect higher prices and are adjusting their holiday spending accordingly. We expect to see shoppers make their lists and check them twice for deals, but a return to pre-pandemic spending levels shows promise for the season overall. Retailers can expect continued store growth as shoppers aim to maximize their budgets with their favorite retailer, presenting new opportunities to build loyalty," Nick Handrinos, vice chairman, Deloitte LLP, and U.S. retail, wholesale and distribution and consumer products leader, said in the release.