For many consumers, inflation, the impact of tariffs and the current state of the U.S. economy are making the upcoming holiday shopping season less full of cheer.
According to a survey of 1,000 shoppers by Doss, the ERP solution provider, higher costs are changing how consumers expect to spend on gifts this year. “The analysis points to a tough season for retailers, with many shoppers buying less and blaming tariffs for higher prices,” the report’s authors said.
The data showed that 45 percent of consumers polled said they expect to buy fewer gifts this season, which includes 51 percent of Gen X. This compares to 16 percent who said they expect to purchase more. “And 71 percent say U.S. shoppers are the ones absorbing tariff costs through higher prices,” the report noted.
Eight percent of respondents who said they blame foreign companies and governments for tariff costs, plan to dole out $574 on gifts, which compares with $458 among everyone else surveyed, which is a 25 percent difference. Thirty-eight percent of those polled said they are increasing their gift budget this year because they expect tariffs to increase prices, which adds an extra $109 on average.
And 20 percent of respondents said concerns about tariffs are influencing their holiday spending decisions more than their initial financial plans.
In regard to dealing with higher costs, 23 percent said they would take on debt rather than cut back on gifts for their family this year. Meanwhile, their outlook on the economy is dim, with 61 percent of consumers describing the U.S. economy as “poor or very poor,” while 31 percent said the same about their own finances. And in a telling piece of data, 22 percent said they expect to still be paying off this year’s holiday spending six months from now.
The financial climate is also determining who even gets gifts this year. The survey showed that 33 percent of consumers polled said they are shortening the list of people they will buy a gift for this holiday. And 68 percent of shoppers polled said they have set a holiday budget and expect to stay within it.
“One in [seven] shoppers (14 percent) will spend no more than $100 on gifts this year, with Gen Z (24 percent) being the most likely to do so and Millennials (10 percent) the least likely,” the report’s authors said, adding that 40 percent said they expect to pay less per gift this season, and only 23 percent said they expect to pay more.
When asked when they plan to do their shopping, 52 percent said they will do half or more of their gift shopping on Black Friday or Cyber Monday.
When asked what they are using to pay for gifts this year, 55 percent cited their paycheck, 47 percent said extra work or side income and 39 percent said savings.