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In Deloitte’s latest take on consumer sentiment heading into the holidays, the consulting company says celebrating the season seems to be back -- and in a big way. The company forecasts a 14% increase in per-person spending compared to 2022, rising to $1,652. And among middle-income shoppers, that gain is much larger, up 26% from last year.
And while plenty of consumers had designated part of their budget for October shopping events, such as Amazon Prime Big Deal Days or Target’s Circle Week, 78% plan to shop the last two weeks of November, a more traditional time to dive into promotions. These shoppers have earmarked a third of their budget for those gifts.
About 66% of respondents say they’ll shop from Black Friday to Cyber Monday.
The spending strength is a little surprising, says Brian McCarthy, a principal at Deloitte, especially given consumers' relatively spartan mood for the back-to-school season. “We’re finding back-to-school is more of a commodity event, while this holiday season, it’s more of a splurge. Consumers are going to lean into it.”
That gain of 14% puts spending plans on par with pre-pandemic levels. And the participation rate is rising to 95%, from 92% in 2022, and 88% in 2021, he tells Marketing Daily.
Another notable shift is more enthusiasm for physical shopping, with 37% saying they intend to purchase in brick-and-mortar locations. “That’s comparable to the behavior we saw in 2018,” McCarthy says.
Some of that trend may be due to people hoping to avoid shipping costs.
For the most part, shoppers are shrugging off inflation and have come to expect higher prices, he says. And just because they plan to spend more doesn’t mean they are oblivious to cost. They say they are budgeting for fewer gifts, buying eight versus nine last year, for example.
They’re also spending more on gift cards, at $300 versus $217 last year, which also points to increasingly pragmatic gifting. “That says consumers are into giving people options, so they can figure out what they want to purchase on their own.”
The retailers that will do best will be those who tap into a mood that is both joyful and careful. “Consumers are saying, 'Hey, we're going to have a great year and spend a lot this holiday. But we’re going to be thoughtful about how we do it.’”