Momentive study: U.S. holiday shopping update
Holiday shoppers brace for rising costs and supply chain issues as they plan to spend less money, start shopping later compared with 2021.
- Despite widespread worry about supply chain issues (55% very/somewhat worried), U.S. consumers plan to start their holiday shopping later this year than in 2021
- More consumers plan to spend less money this holiday season than last year, with rising costs of food (64%), energy (49%), and housing (39%) to blame
- Almost a quarter (24%) of parents plan to go into debt this holiday season; their top shopping categories are clothing, toys & games, home goods, and technology
- Gen Z is eager to get back into stores, with nearly one-third (31%) planning to shop more in-person than online this holiday season
Consumers plan to spend less this holiday season as they brace against rising costs
A majority of U.S. adults are somewhat or very worried about being able to purchase the items they want for the upcoming holiday season (66%). Worries about supply chain issues affecting holiday shopping (55% are somewhat or very worried) are up from last year (45%). In general, 91% of U.S. adults are somewhat or very concerned about inflation, and 17% of consumers do not plan to do any holiday shopping, up from 14% in 2021. Despite these trends, shopping has not started earlier this year. In fact, fewer have started their holiday shopping as-of early October (17% compared with 22% in 2021), and more plan to start between Thanksgiving and early December (27% compared with 21% in 2021).
About half of consumers plan to spend less money this holiday season than last year, despite increasing prices. This year, 51% plan to spend $500 or less (5 percentage points higher than last year) and 37% plan to spend more than $500 (6 percentage points lower than last year). About two-thirds cite rising food prices as a main reason for spending less this year. Rising energy prices (49%), fear of a potential recession (44%), and rising housing costs are also major contributors (39%).
Lower-income consumers struggle to afford holiday purchases
Lower-income consumers—those who have a household income under $50,000—are the most worried about being able to afford their holiday purchases. Three-quarters of lower-income consumers are somewhat or very worried about being able to purchase the items they want this holiday season (76%), compared with 65% of middle-income consumers (those who make between $50,000 and $99,999) and 50% of high-income consumers (those making $100,000+). Most lower-income consumers are dealing with inflation by planning to spend less (63%) than usual, while middle- and high-income consumers are more likely to spend about the same as usual (35% and 44%, respectively). Some lower-income consumers plan to spend more than last year (12%), perhaps acknowledging the rising costs of goods.
Additionally, 21% of lower-income consumers are preparing to go into debt for their holiday shopping this year, compared with 15% of middle-income consumers and just 8% of high-income consumers. “Buy now, pay later” options (such as Affirm, Klarna, and Afterpay) are especially popular with lower-income consumers this year, with 39% planning to use those options for some or all of their holiday shopping; one-quarter (25%) of middle-income consumers and just 16% of high-income consumers plan to use these options.
Some parents plan to go into debt as they shop for clothing and toys
Another group taking a big financial hit this holiday season: parents. Three-quarters (75%) of parents with children under the age of 18 are somewhat or very concerned about being able to purchase the items they want (versus 61% of non-parents), and 24% plan to go into debt to afford their holiday purchases (versus 11% of non-parents). Parents are also more likely than those without children under 18 to use “buy now, pay later” options (38% vs. 26%).
Parents plan to shop primarily for clothing (61%) and games and toys (58%). Clothing is the top category for holiday shopping across almost all ages and genders this year; the notable exception is women 65 and up, who plan to purchase gift cards at a higher rate (41%). While games and toys are second-most popular with men and women ages 35-64, younger women prefer to purchase home goods.
Subscriptions as gifts interest younger consumers, but so does in-person shopping
Subscriptions such as Audible, StitchFix, and HelloFresh are a relatively new entry into the holiday shopping market. Younger consumers, particularly in Gen Z, are more likely to purchase subscriptions as gifts (27% somewhat/very likely), compared with Millennials (18%), Gen X (9%), and Boomers (5%). In a surprising shift, Gen Z is also more likely to shop in-person than the older generations, with one-third (31%) planning to shop more in-person than online (compared with 21-22% of Millennials, Gen X, and Boomers).
Click through all the results in the interactive toplines below: