Americans plan to chop their holiday spending this year
Facing a deadly pandemic, contentious presidential election and ongoing economic woes, Americans might be forgiven for feeling less festive this holiday season. That's the upshot of a Gallup poll that shows most consumers plan to significantly cut back on their gift spending.
Respondents to the survey, conducted over the first two weeks of October, said they plan to spend an average of $805 on presents this year, down from roughly $942 in 2019. That's a nearly 15% average spending drop — a decline that could hurt retailers still reeling from the economic impact of the coronavirus during the critical year-end shopping period.
More than two dozen retailers have filed for bankruptcy since the pandemic, including Neiman Marcus, J. Crew and Brooks Brothers. Lord & Taylor ended a nearly 200-year-old legacy after filing for bankruptcy in August.
The apparel sector has taken a particular beating. Clothing and shoe sales dropped nationally more than 40% over the first five months of the year from the same period in 2019, the Census Department estimates.
In the struggle to stay afloat, many stores opted to start their holiday deals online in October, breaking from the Black Friday tradition of luring consumers away from their barely digested Thanksgiving dinners.
Should Americans' holiday spending plans hold up over the next month, retailers may see average sales gains of just over 2% this year. Since 2000, holiday sales have risen an average of 3.3% per year, according to the National Retail Federation.
That may be the best many merchants can hope for. With lawmakers in Washington failing so far to agree on another dose of federal coronavirus relief, millions of unemployed Americans are in danger of running out of supplementary jobless benefits and other aid before Christmas. Some industries, such as airlines, are already laying off tens of thousands of workers.
As a result, the mindset of consumers remains "fragile," according to Gallup.
"With the number of new COVID-19 cases rising, the fate of a second round of stimulus checks hanging in the balance in Congress, and the presidential election around the corner, the chances are high for a shift in consumers' spending intentions on discretionary items like holiday gifts," the polling outfit said.