Shoppers are spending more
There are a few factors contributing to the projected rise in spending this holiday season.
High prices across the board mean that shoppers will likely need to shell out more for these things. But shoppers may now finally be able to weather these higher prices a little better than they used to.
A still-strong job market is continuing to bump up salaries — with wages climbing 4.2% from last year, according to the most recent data from the Bureau of Labor Statistics. This growth currently outpaces inflation, with inflation-adjusted average hourly wages rising 0.5% in September from a year earlier, according to the Labor Department.
“Despite what seems like a constant drumbeat of negative news — rising interest rates, persistently high inflation and more — consumers remain resilient and their positive outlook for this year's holiday shopping season is a testament to the continued strength in the labor market, with wage growth outpacing inflation," Cecilia Seiden, vice president of TransUnion’s retail business, said in a press release.
However, Deloitte research shows more consumers will be making even more holiday-related purchases this year — 95% compared to 92% in 2022 and 88% in 2021.
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Read MoreSome shoppers are starting early
Long gone are the days where stores wouldn’t start hanging up the bells and the balls until Black Friday. Some major retailers like Walmart, Best Buy and Target kicked off their sales in early October, while Amazon recently held a fall follow-up to its regular July Prime Day event.
“It really is this vicious cycle,” Jie Zhang, a professor of marketing at the University of Maryland, recently told The Washington Post.
“Everybody tries to beat their competitors, be the first to be on the market for holiday sales … and it just pushed everyone to be earlier and earlier.”
But shoppers can benefit from starting earlier and spreading their shopping over a longer period of time.
One mom, who goes by TheVlasmanFamily on TikTok, posted a video in September showing off her gift haul — which includes things like a Play-Doh donut-making set, a Polly Pocket playset and a Pokemon smartwatch.
“I start my Christmas shopping in June,” she says. “I have four kids to shop for, so I have to start early, OK?”
“Everyone always says I’m crazy but when they’re two weeks into December complaining their broke and overwhelmed I get to say told ya so,” she wrote in response to a comment on the video.
She’s far from the only one, with a TransUnion survey conducted in August revealing 22% of households with children have already begun their holiday shopping.
There are multiple benefits to starting your holiday shopping early — like spreading out your haul over several months, instead of racking up the bills within a single month, and it allows you more time to compare prices and find deals.
Less gifts, more deal hunting
Shoppers are making their lists and checking them twice for deals and discounts, determined to have a fun and memorable holiday season without digging themselves into a deep debt hole.
Although some worry they won’t be able to reign in their shopping to stay within budget, the Deloitte report also finds consumers are adapting their spending strategies to balance higher prices with their fiscal goals.
For example, shoppers are planning to cut down on the number of gifts they’re buying this year with the average number going down to eight this year from nine in 2022. Many also plan to increase the number of gift cards as a hedge against inflation (given their fixed amounts).
About two-thirds of shoppers say they’re intending to do some shopping during the Black Friday to Cyber Monday week in order to snag some deals as well.
As you embark on your own annual shopping spree (if you haven’t already) look around online or in stores to compare prices and ensure you’re getting the best deal available. Some online services make it effortless for you to price-check every item in your listand could potentially save you hundreds of dollars.
If you’re struggling to stay on budget, consider giving the classic cash stuffing hack a go. You take your paycheck out in cash and separate it into different labeled envelopes based on your spending categories and saving goals. So you can stash away cash for your holiday haul every month then take it with you into the store when it’s time to shop — and whatever you have in the envelope is how much you have to spend.
Shopping over a longer period of time instead of all at once closer to the holidays also means you could make use of a rewards or cash-back credit card without ending up with a large amount of credit card debt come January. If you shop early, this means you could have your gifts paid off and score some extra cash back or reward points by the time holiday season officially begins.
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