The holiday season is quickly approaching, and along with it, a predictable surge in consumer retail spending for gifts and personal presents. This year brings a unique challenge, however, as COVID-19 outbreaks across the U.S. and world continue to grow heading into the winter, leaving the future of in-person shopping up in the air. The economic crisis brought on by the virus also means more people are saving money, and new estimates reflect this for the upcoming Christmas season in the U.S.
According to new survey data from Gallup, the average household in the U.S. is expected to spend $805 dollars on Christmas gifts this season. That’s a notable decline from last year’s October estimate of $942 and presents the first true downward spike since the $785 estimate in 2016. Ultimately, a majority of Americans still say they’ll spend about the same this year as last, but over a quarter of people say they’ll spend less – an increase of around 10 percentage points from last year.
Retail spending in the country has been historically low due to economic consequences from the COVID-19 pandemic. Still, that doesn’t mean Americans aren’t spending money. While store bankruptcies and closures have never been higher, people are flocking to online shopping in record numbers. Companies like Amazon, Walmart and Shopify have thrived in this socially distanced consumer environment, with the sales of everyday products normally purchased in physical stores skyrocketing on online marketplaces. These companies are gearing up for another year of large sales during November and December despite ongoing COVID-19 outbreaks.
According to Gallup, the American consumer’s mindset can quickly become pessimistic. Large events this year like the presidential election, the federal stimulus relief bill and continuing COVID-19 outbreaks could cause consumer sentiment to wildly fluctuate just in time for Christmas.
