Inflation? recession? Starting with Black Friday, holiday shoppers plan to spend money

0
55

Pedestrians view the Christmas windows of flagship department store Macy’s Inc. on Thursday, December 2, 2021. in the Herald Square neighborhood of New York, USA.

Bloomberg | Bloomberg | Getty Images

Americans are not planning any major holiday spending cuts this year, starting with Black Friday, despite fears of inflation and the risk of a recession being the top concerns of the majority of consumers, according to an annual survey conducted by TSTIME and TSTIME. SurveyMonkey ahead of the first big shopping weekend of the peak season.

Two-thirds of Americans (67%) worry about inflation making it harder for them to buy the items they want. Even more (69%) worry that a recession will limit their ability to make purchases. But expected consumer spending cuts are up only slightly compared to last year — 39% versus 36% — with the majority of Americans saying they expect to spend the same (44%) or more (14%) this year, according to the annual TSTIME|SurveyMonkey Small Business Saturday Survey.

“People are pretty consistent about how much they expect to spend on holiday shopping,” said Laura Wronski, senior manager of research science at Momentive. “Things are going to cost more and you have to accept that there is no secret way around that high inflation,” she said. But she cautioned that there is still a risk that consumer behavior will change once customers evaluate prices. “The intention may be different from the result. They will see sticker shock and find that their budget will not go as far as previous years,” Wronski said.

The survey results show the consumer gap in the economy, with spending issues more prevalent at lower income levels.

Seventy-eight percent of households earning less than $50,000 worry about their purchasing power during inflation this holiday season, a figure that drops to 56% for household incomes of $100,000 or more.

Economic concerns are also relatively high among younger Americans: 73% of 18-34 year olds worry about being able to buy what they want because of inflation, the highest of any age group in the survey.

See also  Investigation launched into late payments crippling small businesses

The data on inflation is consistent with concerns in last year’s survey about a supply chain that was broken at the time.

“Inflation is playing that role in the supply chain saga this year,” Wronski said.

SurveyMonkey’s online poll was conducted November 9-13, 2022, among a national sample of 3,549 adults.

The National Retail Federation earlier this week forecast record sales for the first weekend of Christmas shopping, starting on Black Friday, and expects eight million more shoppers (166 million) this year than last year, the highest level since 2017.

Some recent earnings reports from retailers show consumer resilience. Best Buy reported third-quarter results that beat Wall Street expectations and said it expects holiday spending to more closely resemble historical holiday periods, with shopper shopping activity centered on Black Friday week, Cyber ​​Monday and the two weeks prior to December 25. Abercrombie & Fitch said this week it is “cautiously optimistic” about holiday sales.

But concerns about younger consumers are also reflected in recent retail sales reports. Richard Hayne, CEO of Urban Outfitters, said on his earnings call earlier this week that the company has raised prices at its stores “more than it should” — it has a younger consumer more affected by inflation. The CEO of American Eagle Outfitters said on his earnings call that he expected “a very promotional holiday season.”

Retailers are expected to offer some pretty deep discounts to move inventory, starting with Black Friday.

“Both inflation and recession are interrelated and both top-of-mind for consumers, but habits are persistent,” Wronski said. “This is the time of year when you are expected to make purchases and spend more than you should… That is the main takeaway. They are not making any major changes, despite having concerns about the recession and we’re in a high inflation environment.”

See also  Starbucks workers are planning strikes in more than 100 US stores

The TSTIME|SurveyMonkey survey shows that with many consumer spending habits in line with the past, sharp changes in shopping patterns due to the pandemic, such as e-commerce versus in-store, are becoming a new normal.

Here are some more key findings from this year’s study.

Black Friday is still the #1 shopping holiday

The research has consistently shown that the hype around shopping holidays often outweighs the actual excitement among consumers. More than half (55%) of respondents do not plan to shop on Black Friday, Small Business Saturday or Cyber ​​Monday. Last year it was 52%.

But Black Friday remains the No. 1 shopping holiday that Americans say they will spend on. One in five (21%) are “most excited” to go shopping on Black Friday, nearly double that of consumers who plan to shop on Cyber ​​Monday (12%). Small Business Saturday is a distant third, at 7%.

For small businesses, the concept of a holiday shopping day is more difficult to convey because there are so many different types of businesses that fit under the Main Street umbrella, Wronski noted, from the local bookstore to restaurants and many other types of stores, and there is also less coordination of discounts possible compared to that of chain stores.

There has been a steep decline over the past four years in the number of holiday shoppers planning to visit a small business on Small Business Saturday, from 44% in 2018 to 28% this year.

Amazon and Small Business Saturday Issues

E-commerce gains may have contributed to a permanent drop in Saturday shopping interest for small businesses, which is at a four-year low. But it has also contributed to more small businesses purchasing online, with the percentage of Americans planning to buy online from a small business this year doubling over the past four years, from 9% to 18%, while those who say that they are a personal small business are down 10% (from 58% vs. 48%). During the pandemic peak of 2020, one-fifth (20%) of consumers who planned to spend money on Small Business Saturday said they would purchase online, with this year’s results pointing to permanent gains for Main Street e-commerce. commerce.

See also  Lefty Tiffany Cabán's latest knife to the heart of NYC businesses

A correlation between the Amazon threat and the battle on Main Street, meanwhile, does not appear in the research results. Two-thirds of US adults (66%) say they have an Amazon Prime subscription, almost unchanged from last year, but they are much more likely to say they will spend on Small Business Saturday (33%). That’s nearly double the number of consumers who don’t subscribe to Amazon Prime (18%) and plan to shop on Small Business Saturday.

“We always hear about the Amazon threat, but we’ve never seen it play out like this,” Wronski said. “It shows up in some data in other ways and Amazon is taking away business, but at the same time, people who buy from Amazon are also buying from small businesses at higher rates,” she said, adding that one factor is a correlation between an Amazon Prime subscription and higher wealth levels.

E-commerce gains have slowed, but are here to stay

This year has been a tough one for tech companies betting that the acceleration in profits made during the pandemic would continue as Americans’ behavior has changed dramatically. That’s not the case, but the profits from e-commerce seem to be settling in permanently.

More than half of shoppers (51%) say they prefer to shop in person for the holiday season, compared to those who prefer online shopping (47%). Those numbers are unchanged from last year, but they do mark a significant shift from pre-pandemic years, according to SurveyMonkey. In 2018, 61% of holiday shoppers said they preferred to buy in person, while 37% said they preferred to buy online.

.

LEAVE A REPLY

Please enter your comment!
Please enter your name here