Holiday spending expected to rise this year despite delta variant
Retailers can look forward to a rebound in holiday shopping this year despite the COVID-19 Delta variant’s impact on the U.S. economy.
U.S. consumers will spend up to 9% more this holiday period compared to 2020, when consumers spent a total of $1.2 trillion during the key shopping period between November and the end of the year, according to a forecast from Deloitte. That would be an improvement over holiday spending over the last two years, when sales grew less than 6% in 2020 and just over 4% the previous year.
“This year’s range is considerably higher. What we might find with the Delta variant is that folks will perhaps spend more online versus in brick-and-mortar stores,” said Deloitte Vice Chairman Rod Sides.
Holiday travel expected to rise
Consumers are also prepared to travel more for the holidays this year, spending more on airline tickets and hotel rooms. Many people stayed home during the same period in 2020, which came before COVID-19 vaccinations were approved for emergency use.
“Over the past four to five years, travel has become a big part of folks’ budget. But last year people didn’t travel because they were locked down, and the spend shifted to goods,” he said. “This year is a great chance for travel to rebound, even with the Delta variant.”
Renewed hiring this year and high savings rates puts Americans in a better position to spend than in 2020, according to Deloitte. Last year, Americans devoted more of their holiday shopping budget to home improvement. This year, some of that money is expected to shift to categories like apparel.
“We could see the home decor and improvements categories soften,” Sides said.
One trend likely to continue—growing ecommerce sales, which totaled $189 billion between November 2020 and January 2021. Deloitte projects online holiday spending to increase 11% to 15%. Like last year, consumers who are still wary of the virus are expected to do much of their shopping online and pick up items at stores or curbside.
“More people have taken advantage of that option over the course of the pandemic. More people tried it and got used to it, and we expect that to be vitally important for retailers,” Sides said.
More than 3 in 5 shoppers have already bought, or plan to buy, most of their holiday gifts online this year, according to a new CreditCards.com poll. That’s down slightly from 2020 but up over the previous year. Roughly 38% of consumers say they will make most of their holiday purchases in person.