Consumer Behavior

Consumers pulled back spend in holiday season

Adobe Stock

January 24, 2023

Shoppers in the U.S. reduced retail spend at the pinnacle of the holiday season, and retail sales dipped 1.1%, according to Commerce Department data.

It marked the top monthly dip of 2022, according to a Wall Street Journal report.

The spend reduction happened both online and in stores and included electronics and clothing. Sharp drops took place in car and furniture purchasing.

"Consumers are pulling back a little to get more for their dollar," Andrew Hogenson, a consumer expert at Infosys Consulting, told the news outlet.

With regard to U.S. discretionary retail spend there was also a dip, according to The NPD Group, with spend falling by 2% in 2022. Total unit sales of general merchandise were 7% lower than 2021, according to a press release. Yet the data revealed December retail sales revenue hit parity with the prior year's December activity.

"While holiday season sales usually increase compared to the prior year, the holidays could have and should have been worse this year," Marshal Cohen, chief retail industry advisor for NPD, said in the release. "Double-digit increases in food prices, weather disruptions, early promotions, little depth in discounts and the absence of innovative products made for a long list of shopping hurdles contributing to the muted holiday and annual retail results."