SALT LAKE CIT — The National Retail Federation says it expects $1 trillion to be spent this holiday season.
But the latest numbers on consumer sentiment show consumers are worried about spending.
Zions Bank says higher income shoppers are responsible for most of that spending, but what about everyone else?
According to a Bank of America Institute survey, nearly 58% of consumers say holiday gifts feel more expensive this year.
Here’s why they think those present prices are peaking: 62% say inflation, 58% say tariffs and 33% think it’s companies prioritizing profit.
“Inflation continues to kind of force prices higher,” says Robert Spendlove, senior economist for Zions Bank. “We got a new inflation report yesterday and that inflation is dropping, but it’s still higher than it should be. So people are feeling that price pinch and that kind of forces everyone to spend more.”
68% of consumers say pricing is the most important factor influencing their holiday purchase decisions.
Other factors include convenience, accumulating loyalty rewards and social media trends/influencer recommendations.
Bank of America’s survey also finds consumers are anticipating less wiggle room in their finances this season while shopping.
To save a little extra, 53% say they’re sticking to a budget, 38% say they are shopping at discount stores, 36% are redeeming rewards or using points to save and 31% plan to buy fewer gifts for fewer people.
“As you get a little more stressed with your budget, with your pocketbook, people are trending down looking for a cheaper alternative, looking for trade-offs,” says Spendlove. “And we’re seeing that whether it’s Walmart and Target or whether it’s the dollar stores or McDonald’s and Chipotle, it’s really this trending dynamic that we’re seeing really across the board.”
Speaking of buying fewer gifts for fewer folks, many admitted they’re pulling back on gift-giving altogether.
38% are only buying gifts for immediate family and closest friends, 23% have had a talk with family to scale back on gifts, another 23% they’ll still buy for the same number of people, but they will be smaller/less expensive gifts and 21% plan to give more practical or experiential gifts.
87% of all consumers said they’ll be taking advantage of discount retailers.
54% are shopping at wholesalers, that’s an increase from 39% in 2024.
Meanwhile, Bank of America says outlet malls and e-commerce sites are seeing a decrease in consumers’ interest.
