• by Ray Schultz , Columnist, September 23, 2022

This year’s holiday season is going to be a gloomy one for retailers across the globe.   

Shoppers plan to cut $55 billion from their non-food spending. And 58% are reducing their outlays, according to the Holiday Shopping Trends Report from Metapack, conducted by Retail Economics. 

Consumers cite these reasons for their unease:  

• Rising inflation — 28.8%
• Rising uncertainty about the economy — 18.3%
• Lack of savings — 11.6%
• Loss of earnings — 11.5%
• Rising interest rates — 9.6% 
• Lack of available credit — 8.6%

But what are retailers doing to offset their own rising operating costs? Their responses, which apparently come from other research, are not likely to please consumers:

• Increasing cost of delivery — 34.7% 
• Changes to delivery time frame — 26.2% 
• Increasing promotions —18.1%
• Eliminating free returns — 10.1% 
• Restricting returns policy — 7.6% 
• Increasing staff — 3.3%

The study puts consumers into four categories: 

• Distressed — 34% 
• Secure but concerned — 30% 
• Undeterred — 23.1%
• Stretched spenders — 12.5% 

U.S. shoppers are not as troubled as the overall average: 

• Distressed — 30%
• Secure but concerned — 38% 
• Undeterred — 21%
• Stretched spenders — 12%

But a majority of U.S. consumers are cutting back due to the rising cost of living:

• Plan cut back across ALL related spend — 30.1%
• Yes, plan cut back across MOST related spend — 11.8%
• Yes, plan cut back across SOME related spend — 16.3%
• No, have no plans to cut back relates spend — 41.5% 

In contrast, 40.1% of UK shoppers plan to cut all related spending. 

The UK is facing a 22% reduction in holiday shopping spending, for a total of U.S. $5.2 billion. The U.S. will be taking a 14.4% hit totaling U.S. $30.6 billion. 

Germany will suffer only a 9.4% slide, for $3.4 billion. 

The following product areas will be seeing cutbacks: 

• Apparel — 26% 
• Electricals — 22.3%
• Toys — 20.9%
• Home-related — 19.8%
• Health & Beauty — 17.4%
• DIV & Gardening — 16.7% 

Less-affluent consumers are being especially hard-hit.  

What can brands offer consumers in their holiday emails and web promotions? Free returns are very important to 93% of shoppers, more than speed of delivery, the study states. 

Retail Economics surveyed 8,000 consumers across the UK, USA, Canada, Australia, Germany, France, Italy and Spain in August 2022.