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Holiday Spending Survey: Anxiety Over Economy Tempers Holiday Shopping Frenzy For Some, Others Still Splurge

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The holiday season is the busiest time of the year for most retailers in the US – and across the world for that matter. This year, however, the sound of cash registers will be reduced significantly. Instead, shopping will be done online now more than ever. As the world is faced with pandemic-related challenges, many people plan to cut down on usual holiday shopping, stripping purchases to essentials and re-organizing priorities.

But is there still room for some holiday cheer, exchanging gifts and stimulating the economy in the process? Who is going against the odds and is planning a “close to normal” holiday season?

Our research team at STORAGECafé conducted a survey that investigated people’s attitudes towards holiday-related spending in 2020. As we went through more than 2,000 responses, we were able to identify some interesting facts:

  • 49% of holiday shoppers intend to spend less this year with 32% of respondents planning to avoid holiday shopping altogether
  • Americans plan to spend $767 on average for holiday shopping
  • 1 in 2 Americans intend to spend less than $299 on non-gifts for family and household purchases
  • About 40% of respondents anticipate spending less than $299 on gifts this holiday season
  • Only 6% of shoppers account for “big spender” habits, with planned gift expenses in excess of $2,000
  • Clothing, footwear and accessories are the most popular gifts to give, but home décor and jewelry are also on the regular gift shopping lists
  • 1 in 3 Americans plan on spending most on their children and the least on co-workers and other people
  • About 50% of respondents plan on using monthly income to cover the cost of holiday shopping
  • Secret Santa grinches rejoice: nearly 70% of respondents will not engage in Secret Santa activities
32% of Americans planning no holiday shopping with 49% of holiday shoppers intent on spending less this year

This holiday season is the most irregular in recent American history, to say the least. Ever since 2008,  holiday budgets had been gradually growing Y-o-Y. This year, only 10% of respondents say they plan to increase their holiday spending budget. More than one in three Americans (32%) declare they intend to do no holiday shopping this year and almost one in two Americans (49%) say they plan to spend less than in 2019. Roughly 40% of shoppers claim they wish to spend the same amount as in the previous year.

Most people saying “no” to holiday shopping this year (40% of respondents) have incomes below $49,000/year. The same income group is more likely to spend less than last year even if holiday shopping is still on. About 26% of people earning over $200,000/year also declared that they wish to skip holiday shopping, indicating a shift in everyone’s perspective this year. An additional 27% of high-income earners who plan on keeping the holiday shopping tradition say they will most likely reduce their holiday expenses in 2020.

The most cited reasons for reducing and canceling holiday shopping is having less income or a pay cut (38% of respondents) and worrying about the economy is the main reason for those canceling their shopping (30%).

Americans are set to spend $767 overall on average for the 2020 holiday season

Even if pandemic-related concerns have created a less generalized interest in shopping, most people are still looking forward to traditional holiday shopping. 68% of respondents say they will still engage in gifting and celebrating, with an average estimated spending budget of around $767 this holiday season, based on their self-reporting.

Positivism and emotional connection make the holidays so special and this year more than ever, we all need a strong dose of that. In fact, professor Charles Aaron Lawry at Purdue thinks that “people are craving social and emotional connections due to social distancing and lockdowns, and the primordial act of exchanging gifts will help many people supplant those psychosocial needs.”

12% of survey respondents say they plan to spend between $1,000 – $1,500. Almost 40% of Americans declare they intend to spend less than $499 for the holiday season in 2020, followed closely by 36% of them who claim they intend to spend between $500-$999.

The holiday spending behavior is heavily influenced by income levels. While the majority of those earning $200,000 and more tend to spend $2,000 (39%), lower-income brackets correspond to more modest holiday budgets.

Across all age groups, spending less than $499 is the dominating trend. However, about 8% of both people aged 18-34 and those between 34-54 say they’re committing to allocating more than $2,000 to cover the cost of holiday expenses.

Most women (42%) declare they wish to spend less than $499 this holiday season overall, while most men (36%) say they intend to spend a little more, namely between $500-$900 on their holiday shopping. About 11% of men claimed they intend to dish out over $2,000 for the holiday season, while only 6% of women declared their intention of spending the same amount for the holidays in 2020.

About 80% of Americans say they plan on spending most on Christmas, followed by Thanksgiving (10%). While on the whole people expect to spend the least on New Year’s Eve, around 4% of them anticipate spending the most on this holiday.

People in Orlando, FL turn out to be the biggest holiday spenders in the US

Looking at shopping behavior in some of America’s biggest cities, we found that people in Orlando plan on spending most, with an estimated average budget of $1,000 for the holidays. Orlando is followed by New York City, with people here declaring they intend to spend about $914 for the 2020 holiday season. Angelenos plan on spending even less, as most of them anticipate having a holiday budget of about $770. People in Phoenix have the smallest holiday budget among big cities, as they are expecting to spend about $517.

The average person plans to spend less than $299 on gifts in 2020

Across the country, about 40% of Americans claim they will spend less than $299 on gifts this year. An even smaller share of them (22%) declare they want to allocate between $300-$499 for gifts in 2020. A small fraction of people (4%) say they are willing to dedicate between $1,500- $1,999 for gifts this season. Surprisingly, about 6% of people claim they intend to spend over $2,000 for the same purpose — 2% more than those in the previous budget bracket.

Source: Storage Cafe