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October 20, 2021
Deloitte: Holiday Spending Will Gain But Concerns Linger
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Although Covid-19 continues to make its effects felt in the marketplace, results from the Deloitte 36th annual Holiday Retail Survey indicate that consumers will spend an average of $1,463 per household in the festive season this year, up 5% from 2020.

Deloitte, as part of its 2021 survey, polled retail executives as well as consumers, and it characterized hopes for the holiday season among those execs as strong, as seven in 10 expect consumers to spend more year over year. Still, with supply chain challenges still facing retail, six in 10 retail executives are worried about receiving their holiday orders in time, Deloitte noted, so they are doing what they can in prompting consumers to begin shopping earlier this year. Half of retail executives surveyed expect higher prices and, overall, they anticipate that lower-income shoppers will spend less based on inflation expectations. The end of stimulus payments will play into the holiday inevitably as well, although those who saved cash from the checks they receive may use it to spend during the celebratory season.

Although they have resumed some peak pandemic behaviors, consumers are citing a desire to spend on experience, including socializing, travel and entertaining. The intention to spend on experiential services gained 15% from 2020 to $536 per household or a bit more than one-third of holiday spending. Consumers surveyed have more concerns about inflation than do retailers, with 68% expecting higher prices this holiday season.

That being said, 2021 holiday spending intentions are approaching 2019 levels, signaling a return to something like a normal market environment. However, higher-income households plan to spend five times more than lower-income households. Higher-income shoppers are budgeting to spend 15% more than last year, at an average of $2,624 per household, while members of lower-income groups plan to spend 22% less, at a $536 average per household, according to the Deloitte study. The proportion of consumers who do not plan to spend at all this season is 11.5%, up from 4.9% in 2020. Two-thirds of the non-spender group are from lower-income households versus 12% from higher-income households.

In the end, though, spending will increase across categories with 45% of households planning to spend the same or more on the holidays.

Consumers expect to spend $501 per household on gifts, the survey indicated, an increase of 3% from 2020, while non-gifts purchases will total $426 per household. In-store spending should rise to 33% in 2021 from 28% in 2020, the study suggested, but down from the 36% seen in 2019. The proportion of consumers who are anxious about shopping in-store during the holiday season due to COVID-19 fell to 40% from 51% in 2020. Three out of four worry about stockouts. Even with some recovery to in-store spending, digital continues to gain, with online spending expected to rise to $924 from $892 in 2020, the Deloitte study suggested.

Four in 10 retail executives expect double-digit online channel growth, Deloitte pointed out.

In considering what they would like in the holiday season, 55% of consumers responding to the survey said they want simplified shopping citing online. At 51%, consumers cite mass merchants as their top holiday shopping channel. When they look forward to digital shopping in the holiday season, 73% of consumers plan to use standard delivery, 47% plan to take advantage of same-day or next-day delivery, 33% plan to tap buy online, pick up in-store, and 21% plan to use a curbside pickup. In their shopping, 28% of consumers plan to leverage social media to browse products, at 56%, read reviews or recommendations, at 53%, and discover promotions, at 50%. In addition, 52% of consumers will leverage influencer-generated content for shopping inspiration.

Retail executives told Deloitte they are placing orders with confidence that consumers will be spending, with 33% saying that holiday order volumes have grown by double digits year-over-year.

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