Holiday Spending in the Age of Inflation: A 16% Surge in Spending Intent

As the holiday season approaches, consumer spending intentions are being shaped by a complex interplay of economic factors, with inflation playing a significant role. According to a recent CNBC survey, only 16% of holiday shoppers plan to spend more this season due to inflation, a notable shift from previous years. This article delves into the factors contributing to this change and explores the implications for the retail industry.

The 16% increase in spending intent among consumers is a significant shift from previous years. In 2023, 18% of consumers planned to spend more, indicating a slight decrease in spending intent. This change can be attributed to several factors, including ongoing inflation, high interest rates, and diminishing excess savings (J.P. Morgan, 2024). Additionally, consumers are becoming more value-driven, seeking early promotional cycles and improved delivery speeds to boost sales (J.P. Morgan, 2024). Despite these headwinds, consumers remain optimistic about gifting, with 48% planning to spend the same amount as last year (CNBC, 2024).

Income levels and age demographics significantly influence holiday spending decisions. According to the CNBC survey, older and lower-income Americans, particularly women aged 18 to 49, are most likely to spend less due to inflation. Conversely, younger Americans aged 18-34, urban residents, and Latinos are more inclined to spend more. Among those spending more, 37% cite higher incomes, while 25% attribute it to higher prices, indicating a complex interplay between income, inflation, and consumer behavior.



Retailers must adapt to these changing consumer behaviors and preferences. By emphasizing value, offering intuitive search tools, and showcasing exclusive products, retailers can entice consumers during this stressful season. Additionally, retailers should consider the impact of inflation on their target audience and tailor their marketing strategies accordingly.

In conclusion, the 16% increase in spending intent among consumers is a reflection of the complex interplay between inflation, income levels, and age demographics. Retailers must adapt to these changing consumer behaviors and preferences to remain competitive during the holiday season. By understanding and addressing the concerns of their target audience, retailers can capitalize on the opportunities presented by the holiday shopping season.