‘Twas the fortnight before Christmas, when all through the blog, an economics nerd needed a break from the end-of-year planning slog. So I wrote this instead of staring at Excel for a while!
If you noticed that Black Friday somehow became Black November this year, you’re not alone. With inflation ravaging budgets, retailers decided to meet consumers where they were at, with one of the earliest, longest holiday shopping seasons on record.
The 12 Weeks of Christmas
For at least the last 10 years, the holiday shopping season has started earlier and earlier, according to the National Retail Federation (NRF). With families facing record costs due to inflation, retailers graciously extended sales and offers into the first week of October this year. It’s no surprise, as holiday sales make up 19% or more of many retailers’ annual sales.
Shoppers, looking to stretch their budgets and lessen the burden of holiday shopping, have taken them up on this extended deal-laden window. According to NRF surveys, 46% started browsing or even buying prior to Halloween, with 44% believing it’s better to purchase early in case inflation drives prices even higher later in the season. With all these shifts, Black Friday and Cyber Monday have played a significantly smaller role in both shoppers’ and retailers’ plans in 2022.
Haul Out the Holly, and the Checkbook
After pulling back a bit last year, households are making celebrations and gift-giving a priority, according to a study from Deloitte. That comes at whatever cost necessary, with 43% of shoppers willing to dip into savings, take on credit card debt, or use buy now/pay later services as they don’t earn enough to afford the gifts they plan to give.
Overall spending will hit a record high in 2022, in large part due to inflation and the microchip shortage driving up costs. NRF forecasts total sales growth between 6-8% YoY, coming in at $942.6 B to $960.4 B. While strong job growth and income growth help bolster those numbers, you’ll note that as of October, inflation was 7.7%, driving much of the total spending increase.
Online sales will make up 10-12% ($262.8 B – $267.6 B) this year (although I personally expected this number to be even higher) with consumers more confident about returning to physical shopping after pandemic concerns the last few years.
All I Want for Christmas is You (to Celebrate with Loved Ones)
At the end of the day, the holidays are a time for giving, sure, but they’re more about being with the ones you love. So, whether you’re digging deep into your bank account to rain (snow?) luxurious gifts down on your kith and kin or stuffing their stockings with more “from the heart” fare, be sure to slow down and enjoy your time together more than anything else. At the end of the day, that’s all any of us really need. And maybe some Eras tickets.