Last year, Lucila Gomez and her husband started their holiday shopping around Thanksgiving and wrapped it up a week before Christmas, spending $750 on tablets and clothing for their three children and relatives.
This year? Gomez is waiting until she gets her annual bonus on Friday to get started — and she’s limiting her spending to $200, sticking to World Cup-themed jerseys for her 10-year-old twins and 6-year-old.
“Last year, we were confident. We were like, ‘Get them whatever they want,’” said the 49-year-old Buckeye, Ariz., resident, an hourly worker in the billing department of a health company. “This year, we’re waiting until we both get paid. We want to go into the New Year not owing anything.”
Last-minute holiday shoppers are back in force — and inflation is partly to blame.
For the first two years of the COVID-19 pandemic, many were buying earlier in the season, afraid of not getting what they wanted because of shortages of products or delays in deliveries. They also had more money to spend, thanks to government stimulus checks and child-care credits.
But this year, supply chain snags have eased and shoppers aren’t as worried about availability as they are about higher prices on everything, including rent and food — causing many to postpone their buying until the last minute.
Gomez, for instance, said that even though she and her husband, an electrician, each got a raise, the extra money still wasn’t enough to offset their rising expenses. Their family even moved in with her parents after their monthly rent jumped from $1,500 to $2,000 earlier this year. She’d hoped to save for a house, but mortgage rates keep going up.
Last-minute shopping is also being encouraged by a quirk in this year’s calendar, according to Brian Field, global leader of Sensormatic Solutions, which tracks store traffic. With Christmas falling on Sunday, consumers have all week to shop.
Retailers are relying on the last-minute spending rush to help meet their holiday sales goals after a weaker-than-expected November.
Americans cut back sharply on retail spending last month as the holiday shopping season began amid high prices and rising interest rates that were taking their toll on households, particularly lower-income families.
Americans’ spending has been intact since inflation jumped almost 18 months ago, but shoppers may be beginning to lose their ability to keep spending at the same rate as inflation continues. Inflation has retreated from the four-decade high it reached this summer, but it remains elevated enough to sap the spending power of consumers.
Still, overall holiday sales should be decent, though growth in those sales is expected to dramatically slow down from a year ago.
The National Retail Federation, the nation’s largest retail trade group, is slated to release the actual results for the combined November and December period next month. The group expects holiday sales growth will slow to 6% to 8%, down from last year’s blistering 13.5% growth.
The last stretch of the holiday season is critical.
On average, the top 10 busiest shopping days in the U.S. — which includes Wednesday, Thursday and Friday of this week and Monday of next week — account for roughly 40% of all holiday retail traffic, according to Sensormatic. However, retailers might expect even larger numbers this year as high gas prices force consumers to consolidate their shopping trips and everyone converges over the next few days, Sensormatic said.
But those holding out for bigger discounts right before Christmas may be disappointed. Retailers in general have maintained the same discounts they’ve been offering since Black Friday. There could be some deals, however, in areas such as home and furniture, according to DataWeave, which tracks prices for hundreds of thousands of items across roughly three dozen retailers, including Walmart, Target and Amazon.
DataWeave’s recent data show the average prices for furniture were discounted 23% during the second week of December, compared with 12.8% during Black Friday week. In home furnishings, average price cuts were 17.2% compared with 11.2% for Black Friday week.
Krish Thyagarajan, president and chief operating officer at DataWeave, believes that discounts for electronics are ticking up from Black Friday levels in the last few days before Christmas, but price cuts for clothing should remain a little over 20%, more generous than the average 16% discount around this time last year.
Inflation or not, there will always be the perennial procrastinators such as Evelyn T. Peregrin, who last year used COVID-19 as an excuse to delay her holiday buying. Several relatives had the coronavirus, so she didn’t have to buy or deliver their gifts until after Christmas.
Now it’s her travel expenses of about $700 that are eating into her budget. The 28-year-old moved to Puerto Rico from New Jersey with her husband earlier this year, forcing her to scale back her holiday spending to about $150 from last year’s $250.
“I will order probably a few things online,” she said, “and then end up having to go to a store last minute.”