By Zoe Han
Consumers are increasingly realistic about freebies
Americans bow down to their problems and put an end to their worries and woes.
In fact, they seem pretty excited about the upcoming holiday season, despite stagnating wages, rising inflation and the ever-looming threat of a recession, according to a survey by TransUnion (TRU), the travel agency. consumer credit rating, released Thursday.
Indeed, shoppers told TransUnion they were becoming more realistic about their freebies in order to cope with rising prices. The researchers said these changes in buying behavior were particularly pronounced among low-income consumers.
Here’s how holiday shoppers aim to fight inflation: — One-third of consumers said they plan to buy fewer gifts. — 17% said they plan to buy cheaper versions of gifts. — 13% are turning to more practical gifts like gas cards. — 12% will buy the same number of gifts and possibly spend more.
“While budgets were mostly stable or increasing, consumers of all generations still needed to make adjustments to their vacation purchases in order to stretch their budgets,” the report said.
Millennials and baby boomers expected to spend more this year, the researchers said. Baby boomers were likely big spenders due to the presence of grandchildren, they added.
The TransUnion survey was conducted online with 3,000 adults and was conducted August 11-18.
The consumer price index rose 8.2% in September compared to a year ago. With rising grocery bills and essentials like gas and electricity, many Americans are cutting back on their spending.
Low-income households told MarketWatch that they are changing their eating habits and even delaying utility payments to buy food.
“Despite documented concerns about inflation and a possible recession, consumers seem very excited for this year’s holiday shopping season,” said Mark Rose, senior director of retail operations at TransUnion.
Retail sales last November and December hit a record $886.7 billion, according to the National Retail Federation. The trade association has yet to release its holiday shopping forecast for 2022, but there are early indications that people are hungry for bargains.
There are some early hints that shoppers may be cutting spending and increasing bargain hunting. Online holiday sales are expected to rise 2.5% to $209.7 billion this year, Adobe (ADBE) said. This is the slowest growth rate since 2012 and pales in comparison to the 8.6% increase in online holiday sales last year.
Other days consumers may be able to counter those higher prices, at least on some items. The biggest discounts are expected to occur between Thanksgiving and Cyber Monday, Adobe said. Thanksgiving Day (November 24) will be the best day to buy electronics. Black Friday (November 25) will have the biggest TV discounts.
The Saturday after Thanksgiving (November 26) will see the biggest discounts on toys, with the biggest deals on clothes and sporting goods on Sunday (November 27) and the best deals on computers and furniture on Cyber Monday (November 28).
Retail sales stagnated in September, the government said on Friday, another sign that the economy is likely to slow in coming months as interest rates rise and consumers cut back on spending. But they increased by 8.2% over the year.
With inflation at its highest level in 40 years, 47% of consumers said they were worried about their finances this holiday season, according to a separate report from Morning Consult’s holiday report.
More than 80% of consumers said they were no less excited about this year’s holiday shopping season. Some 23% of all consumers said they were in better spirits than a year ago.
Of those who expressed excitement about buying gifts this year, 35% said they were in better financial shape, 27% said they were looking forward to getting back to normal – and Christmas cheer is one way to do that – and 21% said the holiday season helps them take their minds off the news.
“Although some consumers end up spending more on their holiday shopping simply because of the higher costs of many goods and services, there is good evidence that consumer optimism is intact,” TransUnion’s Rose said. “It’s the result of rising incomes and a still strong job picture.”
(END) Dow Jones Newswire
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