Many American families are not planning to increase their spending, or spend at all, for the upcoming Christmas season, according to London-based consulting firm Deloitte.
Deloitte’s latest annual Holiday Retail Survey shows that, with supply chain issues and growing worries about inflation, 11.5 percent of overall consumers say they do not plan to spend on holiday shopping at all. That’s more than double from 2020 (4.9 percent) and nearly quadruple from 2019 (2.9 percent).
The report also finds that higher-income households are planning to spend five times that of lower-income households. Holiday shoppers from higher-income households plan to spend 15 percent more than they did last year (averaging $2,624 per household), while lower-income groups are expected to spend 22 percent less (averaging $536 per household). Two-thirds (65 percent) of the aforementioned non-spender group are from lower-income households, compared to 12 percent from higher-income households.
Overall, the report estimates that holiday spending will average $1,463 per household. That’s a 5 percent increase from 2020, with higher-income shoppers driving nearly all gains.
Consumers are found to be more worried about inflation than retailers, according to Deloitte. More than two-thirds of consumers (68 percent) expect product prices to increase this holiday season, compared to 53 percent of retail executives.
In addition, Deloitte forecasts that spending on gifts will grow to $501 per household, an increase of 3 percent since 2020, while non-gifts purchases will total $426 per household.
“Retailers will see strong growth this holiday season, even as supply chain issues, inflation, and highly bifurcated spending continue to impact our industry,” said Rodney Sides, Deloitte’s vice chairman and U.S. leader of retail and distribution.
“Retailers who remain resilient by offering promotions early, appealing to in-store and online shoppers, and planning their inventories well in advance, are likely to experience not just a robust holiday season, but will be well-positioned for continued sales into the new year,” he added.
Deloitte’s report was based on a survey conducted online from Sept. 7 to 14 among 4,315 consumers, as well as a survey of 30 retail executives across retail categories, 90 percent of which have annual revenues of $1 billion or more, conducted from Sept. 3 to 16.
The report comes as the U.S. supply continues to face challenges, leaving container ships stuck waiting outside California ports and leaving some store shelves empty. Transportation Secretary Pete Buttigieg predicted more supply chain bottlenecks because of the COVID-19 pandemic in other countries.
“If a shoe factory closes in Vietnam in September for a COVID outbreak, you’re going to see the effect of that at the mall in December or January,” Buttigieg said during a televised interview on Wednesday.