Shoppers this holiday season are expected to increase their spending, citing optimism about the economy and a focus on savings and value, according to Deloitte’s 2024 holiday retail survey. The fourth fiscal quarter, which includes the months of October, November, and December, is known for robust retail volume as companies focus on achieving annual financial goals.
With inflation easing, the Federal Reserve cutting interest rates for the first time since 2021 and the stock market reaching all-time highs, consumers are projected to feel more comfortable spending this holiday season.
The 2024 Deloitte holiday retail survey found that respondents plan to spend 8% more year-over-year and are focused on finding deals and better value in their purchases. The survey reports that 78% of respondents plan to participate in October and November promotional events, up from 61% in 2023.
“Believe it or not, I know it feels so early, but a Bread Financial poll found that 25% of people have already started their holiday shopping by the end of [October],” Trae Bodge, a smart shopping expert, said on CBS. “Seventy-six percent of people are looking actively for these deals, these sales, comparing prices. We are becoming increasingly promotional, so these big sales that we are seeing are very exciting for shoppers.”
The Deloitte survey projects that the average holiday spending in 2024 will be $1,778 per person compared to last year’s $1,652. The $100,000 to $199,000 income group’s spending is expected to surge the most, rising 17% to $2,546 from $2,167 the previous year.
Despite the increase in spending, the survey finds that at least 40% of respondents across all income groups display five or more signs of “frugal behavior.” This includes cutting back on costs and finding better deals.
Consumer preferences will also shift this holiday season. Deloitte’s survey reveals that growth in spending on experiences is rapidly outpacing growth in spending on traditional retail categories. Compared to last year, spending on gifts is projected to decrease by 3%, while spending on non-gift items — such as party apparel and holiday decor — will increase by 9%. Spending on experiences is expected to increase by 16% to $735, up from $632 on average in 2023.
“People are starting to think about what experiences they want to have. Retailers are going to need to have their promotional offers and content queued up now, to reach those would-be travelers, those would-be revelers, those would-be party throwers,” Managing Director at Deloitte Consumer Industry Center Steve Rogers said.
Deloitte forecasts a 7% to 9% increase in online shopping this holiday season, outside of traditional brick-and-mortar stores. Forty-eight percent of consumers plan to shop using their smartphone, with increased engagement among younger demographics — 58% of Generation Z and 62% of millennials. Additionally, 29% of consumers plan to purchase gifts off wish lists posted on retailers’ sites such as Amazon and Walmart.
The Deloitte survey highlights an increase in consumer optimism about the economy, with 43% of respondents expecting the economy to improve next year, up from 34% in 2023. With equity markets at all-time highs and inflation stabilizing, analysts believe consumers are in great shape going into the holiday season.
“With inflation coming down a little bit, there will be a little bit more foot traffic to spend. The overall dollars will not be significantly different than last year, where we grew at 3.9%, but with inflation coming down there will be more foot traffic, very likely,” Visa Chief Economist Wayne Best said on CNBC Television.
