Heading into the holiday selling season, half of Thanksgiving food shoppers and holiday gift-givers say inflation will impact their spending plans, according to “Holiday Spending 2023: Consumers Share Food- and Gift-Shopping Plans,” based on an Oct. 23, 2023, survey of more than 1,100 U.S. adults aged 21 and over.
Fifty percent of surveyed adults say inflation will alter their Thanksgiving food spending. Among that group, nearly six in 10 say they anticipate spending more money compared to last year, with 28% anticipating spending more to buy the same amount of food and 13% planning to spend more on less food. Only about two in 10 of these shoppers plan to spend more and buy more food.
One-fourth of those who say inflation has affected their Thanksgiving food budgets expect to spend the same amount as last year but buy less food. Sixteen percent plan to spend less and buy less.
Big picture, one-third of respondents (34%) expect to spend more on Thanksgiving food this year than they did in 2022, including 14% who say they’ll spend “much more.” About half anticipate spending the same amount on their Thanksgiving dinners and one in 10 say they’ll spend less compared to last year.
For December holidays, four in 10 of respondents expect to spend more on food for Christmas, Hannukah and/or New Year’s Eve celebrations, with 16 percent anticipating spending “much more.”
“Even in tougher economic times, when customers are struggling to make ends meet, a preponderance of shoppers will stretch their budgets to make holiday feasts enjoyable and memorable,” says Gil Phipps, senior vice president, global customer solutions for Advantage Solutions. “These are the meals that bring us together, that will provide cherished memories for years to come. Credit cards may carry a heavier load or corners may be cut elsewhere, but most shoppers are unwilling to curb these celebratory feasts.”
Nearly half (47%) of holiday gift buyers say inflation is altering their spending plans this year. Among that group, 63% expect to buy fewer gifts this year compared to last year, including the 13% who plan to spend more money but buy fewer presents, 26% who expect to spend about the same but buy fewer gifts and 24% who will spend less and buy fewer gifts.
Twenty percent of those who say inflation is impacting their spending on gifts say they’ll spend more on the same number of gifts; 13% will spend more to buy more gifts. About 3% of those who say inflation is impacting their gift spending say it will cause them to buy no gifts this year.
Overall, more than one-third of survey respondents (36%) anticipate spending more on gifts this year, including 11% who plan to spend “much more.” Nearly half (45%) plan to spend the same amount. Fourteen percent will spend less. (Four percent of respondents say they don’t typically give or spend money on holiday-season gifts.)
“Shoppers are expecting inflation to meaningfully impact their gift purchases this holiday season,” Phipps says. “Many shoppers say they will shop around and even look to alternative channels to find value in their gift purchases. This will add additional pressure to these already busy times. Shoppers will feel the dual stresses of stretched budgets and, with more time spent searching for bargains, less time to savor the season.”
Among the report’s other findings:
- Inflation is causing holiday hosts to reconsider their plans. Nearly one-third of those hosting Thanksgiving say they’re inviting fewer people this year because of higher food prices. Inflation is also causing people to reconsider their December holiday gatherings: More than one-fourth of those hosting get-togethers plan to host fewer this year.
- A full three-fourths of Thanksgiving food shoppers anticipate shopping at a brick-and-mortar big-box store, like Walmart or Target, for at least some of their shopping-list items. Almost half (48%) will head to grocery stores and four in 10 (43%) will shop at warehouse club stores. With tight budgets on the minds of many, one-seventh of respondents say they’ll do some of their Thanksgiving shopping at dollar stores.
- A retailer’s promotions on Thanksgiving staples will influence where eight in 10 food shoppers spend their money, with one-third of those saying where they buy their Thanksgiving food will be “very much” influenced by low prices and discounts.
- Asked how they’ll be spending their holiday budgets, nearly four in 10 adults ranked gifts as getting the biggest share of their dollars. Three in 10 ranked food as the No. 1 category of holiday spending. About one in 10 ranked gifts for themselves as their No. 1 spending area.
- Attractive prices and great deals make up the most important factor influencing where holiday gift buyers will spend their money. The second most important factor is the availability of the product they’re looking for. The ease of the transaction and whether a trusted brand is available are also significant considerations when consumers are choosing where to shop for gifts. A retailer’s return policy/cost of returns and whether shoppers feel a retailer is trustworthy are ranked lower as influencers but are nearly equal factors in shoppers’ minds.
The report also looks at when gift buyers begin their holiday shopping and what types of gifts they’re buying.