Dive Brief:
- Despite inflation woes, eight in 10 shoppers expect their holiday spending budgets to either remain the same or increase from last year, according to a new survey of 1,007 consumers from the ICSC. That proportion is slightly higher than the 73% of consumers who said the same last year.
- The ICSC predicts that 87% of consumers will shop at brick-and-mortar stores this holiday season, and three-fourths of shoppers plan to buy their holiday goods online. The organization forecasts a 3.8% increase in retail sales during October through December.
- Seventeen percent of consumers anticipate buying online and picking up in-store. Among consumers who are shopping in stores and online, respondents said they plan to spend 41% of their holiday budget in physical stores and 42% online, the survey found.
Dive Insight:
The ICSC’s survey echoes other research indicating that retail sales could increase this year. In September, Deloitte released a report projecting that retail sales could rise between 3.5% and 4.6% this holiday season, possibly pushing the holiday sales from November through January to $1.54 trillion to $1.56 trillion. ICSC’s report is forecasting a holiday spend of up to $1.6 trillion.
Though many consumers plan to spend the same or more this year, inflation has driven some to reduce their holiday budgets, the ICSC found. Of the consumers who expect their budgets to rise this year, 42% attribute that increase to inflation and a higher cost of holiday items. Conversely, 54% of consumers said they plan to spend less this year because of the same reason, according to the survey.
Other research suggests that while consumers plan to spend more, that increase varies across incomes. Another recent Deloitte report predicted that holiday shopping budgets could grow 14% year over year. While shoppers earning between $100,000 and $199,000 anticipate spending 2% more than last year, those with incomes between $50,000 and $99,000 expect to spend 26% more than they did last year.
The ICSC’s report adds more context to consumers’ possible online shopping behaviors this year. Shoppers are expected to spend $221.8 billion online between Nov. 1 and Dec. 31, up 4.8% year over year, an Adobe Analytics report predicts.
In addition to dividing their shopping online and in stores, consumers anticipate shopping at 2.4 types of retailers on average, down from 3.4 in 2022, according to ICSC’s survey. Nearly two-thirds (63%) of shoppers plan to shop at discount department stores, followed by traditional department stores (34%) and electronics stores (22%), the survey found.
“We expect a positive holiday shopping season this year as consumers continue to spend in spite of economic headwinds,” Tom McGee, president and CEO of ICSC, said in a statement. “This year’s forecast shows the industry is balancing itself out after rapid growth over the last few years, setting retailers up for another successful holiday season.”
