Consumer Spending Forecasts Suggest It's Beginning To Look A Little More Like Christmas 2019.
Just-released studies from The NPD Group and the International Council of Shopping Centers are following the lead of other reports predicting increases in consumer holiday spending, in-store and online shopping, and getting gift shopping done early.
NPD's report projects a 5% increase in holiday spending during the period from October 2021 through early January 2022, a slightly more conservative estimate then Deloitte's mid-September prediction of a 7-9% sales bump, or ICSC's forecast of a 9% sales increase for just November and December.
"New optimism, along with underlying uncertainty, are fueling shopping expectations, making this a more complex holiday season for consumers and marketers, alike," NPD chief retail industry adviser Marshal Cohen says, "but retailers and manufacturers that remain flexible will be able to navigate the diverse landscape of consumer behavior and arrive at a successful holiday result."
According to NPD's research, three in ten U.S. shoppers anticipate spending more this year, with one-third expecting to do so as they plan to visit family and friends over the holidays. That's close to the findings of installment payments company Klarna's report released last week, showing one-third of consumers plan on spending more vs. last year, with more than half increasing their gift budgets between $101 and $500. ICSC, meanwhile, says the average person expects to spend $637 on gifts and other holiday-related items, with more than three-fourths of U.S. shoppers saying they'll spend as much or more than they did last year.
Both NPD's and ICSC's data suggests pandemic-related shopping behaviors, product availability issues and earlier retailer promotions are driving more consumers to hit stores and shopping websites before Thanksgiving. NPD data shows 51% of consumers intend to do so this year, compared to 49% a year ago, while three-fourths of consumers surveyed by ICSC say they expect to start shopping earlier, with 45% doing so to make sure they can get certain products, and 42% to take advantage of early deals and promotions.
"We saw retail sales beat expectations in August, a clear indication that consumers are increasingly looking to spend," ICSC President and CEO Tom McGee says in a story for MediaPost. “Our recent consumer survey found that 65% of respondents are now visiting physical stores for non-essential goods, compared to just 54% two weeks prior. Mall-based retailers like JCPenney and Macys have also ramped up their promotional cycle in recent weeks, and consumers are ready to respond.”
While according to NPD's survey, most shoppers feel this year's holiday season will look more like last year than 2019, more than half are open to shopping in stores now that vaccines are widely available, and nearly one-third are less worried about COVID than last year. ICSC's results show that while crowded stores remain a concern for nearly one-third of shoppers, close to two-thirds feel comfortable in stores as long as there are health and safety precautions in place. “We can expect to see retailers continue to encourage things like masks, contact barriers and more to ensure both shoppers and employees are safe this holiday season," McGee says.