Overall US holiday spending will be up 5% year-on-year with average spend at $1,463 (versus $1,387 in 2020) largely driven by higher-income households, according to Deloitte’s 2021 Holiday Retail Survey. This year, Deloitte surveyed over 4,000 American consumers and 30 executives of the largest US retail companies.
Consumer sentiment is stabilising amid waning pandemic anxiety. Retail executives are also optimistic about the holiday sales – 7 out of 10 executives expect consumers to spend more this year as compared to the previous year.
Holiday budget is largely driven by high-income groups as they expect to spend 15% more as compared to the last year. At the same time, low-income consumers plan to spend 22% less than in 2020.
The average shopping duration is expected to extend to more than six weeks. This is mainly because 75% of consumers are concerned about stockouts and shipping delays, thus motivating them to start their shopping earlier.
Most consumers expect higher prices this holiday season due to inflation, hitting lower-income groups especially hard. Therefore, they will be buying less during the holiday season shopping.
The trend towards online shopping will continue. However, as health and safety anxiety decreases, some shoppers will return to browsing physical stores. According to forecasts, the share of in-store spending is expected to rise to 33% in 2021, although this is still below the 36% seen in 2020.
Consumers are ready to spend money on entertainment and travel. The growth in this segment is expected to reach 15% in 2021 as compared to 2020.
“We can already see a decrease in anxiety around health and safety that will stimulate the overall average spend. However, holiday shopping is not going to bounce back to the pre-pandemic levels just yet,” said Oleksandr Yampolskyi, Director, Retail and Wholesale Group Leader at Deloitte Ukraine.
He believes that retailers should offer promotions early, to both the in-store and online shoppers, as holiday shopping will start earlier this year. This will allow them to experience not just a robust holiday season, but position them well for continued sales in the upcoming year.
“Perhaps the most sobering fact about the holiday shopping is that low-income groups continue to suffer. For example, their average holiday spending has decreased almost twofold in the last two years,” said Oleksandr Yampolskyi.