A new survey from Personal Capital has found that 60 percent of Americans will be spending less money this holiday season, citing inflation and recession worries as the reasons for smaller shopping budgets. The financial company polled 2,200 adults with help from Morning Consult, a business intelligence company that conducts custom market research.
The average shopping budget for Americans is down 23 percent from last year, which is equal to roughly $200. In order to afford spending this December, 47 percent of respondents said that they will be eating out less frequently and will also be cutting back on other non-essential purchases – a 9 percent increase from 2021.
Overall, the survey found that 37 percent of people plan to spend around $250 or less on gifts this year. Additionally, 16 percent of Americans said that they aim to spend less than $100 on all of their holiday shopping. Gen Z and Millennials are the biggest age groups who plan on cutting their budgets this year, with 25 percent saying they plan to give out DIY or secondhand gifts.
When it comes to how Americans will be shopping this holiday season, 34 percent plan to increase their online purchasing compared to last year. Fast and free shipping were two of the biggest factors people make when deciding which online retailer to shop from, coming in at 79 percent and 77 percent, respectively.
The news of constrained shopping budgets comes as many retailers worry that they will not be able to fulfill their customers’ holiday orders. According to a report from software company Coupa, 7 in 10 retailers expect that issues with the supply chain will have a negative impact on their business. Many are trying to find workarounds to combat the issues – 66% have or plan to over-order products, 55% have or plan to rush-order products, and 33% have or plan to invest in additional inventory management tools.