NRF Expects Increased Spending on Holiday Gifts Despite Pandemic

As the holiday season draws near, the National Retail Federation (NRF) and Prosper Insights & Analytics conducted a study predicting that consumers will be spending more on gifts this year. The survey consisted of 7,660 participants in the United States and revealed that shoppers plan to spend an average of just over $997 during the festive period. Out of this total, approximately $650 will be allocated to gift purchases, while $230 will go towards non-gift holiday items like decorations and food. The remaining $117 will be used for other non-gift purchases.

Although there is expected to be a decrease of $9 in spending on gifts compared to last year’s average of $659, this figure still surpasses the five-year average of $629. On the other hand, spending on non-gift holiday items is predicted to slightly increase by $3, reaching $227 for this year. The positive performance can be attributed, in part, to consumers wanting to shift their focus away from the challenges of the pandemic and embrace the joyous spirit of the season. Additionally, respondents mentioned changes in their holiday plans, with 19% stating that they would be staying home instead of traveling. Among these individuals, 53% expressed their likelihood to spend more on holiday items due to their changed circumstances.

Matthew Shay, the NRF president and CEO, expressed his admiration for the resilience and adaptability of consumers during these unprecedented times. Retailers are determined to prioritize the safety of their customers and employees as they gear up for the holiday season. It is worth noting that online shopping continues to be a popular choice, with 60% of consumers planning to incorporate it into their holiday shopping. This aligns with the overall increase in e-commerce sales since the start of the pandemic. Among those planning to shop online, 91% will take advantage of free shipping, 44% plan to utilize buy-online-pick-up-in-store services, and 16% expect to use same-day delivery.

When it comes to shopping destinations, department stores, discount stores, and grocery stores or supermarkets are the top choices for consumers this year. Approximately 45% of respondents named department stores as their preferred location, while 43% and 42% respectively listed discount stores and grocery stores or supermarkets. Furthermore, holiday inventory and promotions starting earlier this year have influenced consumers to begin their shopping earlier than usual. The main reasons for early purchases include sales and promotions, the desire to avoid crowds, and the stress of last-minute shopping. Additionally, concerns about potential item shortages (26%) and pandemic-related delivery delays (19%) are encouraging consumers to shop ahead of schedule.

This NRF report provides a more positive outlook compared to a similar study by KPMG, which predicted an 18% decline in holiday shopping budgets for 2020. KPMG attributed this decrease to the significant uncertainty and reduced household income resulting from the ongoing coronavirus crisis. According to their survey, 19% of respondents expressed caution in their spending due to the pandemic.

As the holiday season approaches, it is evident that consumers are determined to bring joy and celebrate with their loved ones, even in the face of adversity. Retailers are adapting to meet the demand and ensure a safe shopping experience for everyone. The resilience and adaptability of consumers continue to impress, showcasing their commitment to embracing the positive aspects of the holiday season.

Useful links:
NRF’s Coronavirus Holiday Planning Guide
KPMG’s U.S. Holiday 2020 Outlook