Last year, Lucila Gomez and her husband started their Christmas shopping around Thanksgiving and completed it a week before Christmas, spending $750 on tablets and clothes for their three children and relatives.
This year? Gomez is waiting until she receives her annual bonus on Friday to get started – and she limits her spending to $200 and sticks to World Cup jerseys for her twins, 10, and a 6-year-old.
“Last year we were confident. We said, ‘Get them what they want,'” said 49-year-old Buckeye, Arizona, a hourly worker in the billing department of a health care company. “This year we’re waiting to get paid for both of us. We want to start the new year with nothing to owe.”
Last-minute holiday shoppers are back in force — and inflation is partly to blame.
In the first two years of the pandemic, many shopped earlier in the season for fear of not getting what they wanted due to product shortages or shipping delays. They also had more money to spend thanks to government stimulus checks and childcare loans.
But this year, supply chain issues have eased, and shoppers aren’t as concerned about availability as they are about higher prices for everything from rent to food, leading them to make their purchases until the last minute move.
For example, Gomez said that while she and her husband, an electrician, each received a raise, it still wasn’t enough to offset their increasing expenses. In fact, she said her family moved in with her parents after her monthly rent went from $1,500 to $2,000 earlier this year. She was hoping to save for a house, but mortgage rates keep going up.
Last-minute shopping is also being encouraged by a feature in this year’s calendar, according to Brian Field, global head of Sensormatic Solutions, who tracks store traffic. Since Christmas falls on Sunday, consumers have all week to shop.
Retailers are relying on the last minute spending rush to meet their holiday sales targets after a weaker than expected November.
Americans cut retail spending sharply last month as the holiday shopping season kicked off with high prices and rising interest rates taking their toll on households, especially low-income families.
Retail sales fell 0.6% in October-November after rising sharply by 1.3% in the previous month, the government said last week. Sales fell at furniture, electronics, and home and garden stores.
Americans’ spending has been intact since inflation first spiked almost 18 months ago, but shoppers’ ability to sustain spending during a period of high inflation may be beginning to weaken. Inflation has retreated from a four-decade high reached this summer but remains high enough to weaken consumer spending power.
Still, holiday sales should be decent overall, although holiday sales growth is expected to slow dramatically from a year ago.
The National Retail Federation, the country’s largest retail group, is expected to release actual results for the combined November and December period next month. The group expects holiday sales growth to slow to a range of 6% to 8%, down from the whopping 13.5% growth a year ago.
The final phase of the holiday season is critical.
On average, the 10 busiest U.S. shopping days — including Wednesday, Thursday, Friday this week, and Monday next week — account for about 40% of all holiday retail traffic, according to Sensormatic. However, retailers could expect even bigger numbers this year as high gasoline prices force consumers to consolidate their shopping sprees and everyone is coming together over the next few days, Sensormatic said.
Those waiting for bigger discounts just before Christmas may be disappointed. Retailers have generally maintained the same discounts they’ve been offering since Black Friday. But there could be some deals in areas like home and furniture, according to DataWeave, which tracks prices for hundreds of thousands of items at around three dozen retailers including Walmart, Target and Amazon.
The latest data from DataWeave shows that average furniture prices fell by 23% in the second week of December, compared to 12.8% in the Black Friday week. For home furnishings, the average price reduction was 17.2%, compared to 11.2% during the Black Friday week.
Inflation or not, there will always be perpetual procrastinators like Evelyn T. Peregrin, who last year used COVID-19 as an excuse to put off her holiday shopping because several relatives had the virus, leaving her with no gifts to buy or deliver until then after Christmas.
Now it’s her travel expenses of about $700 eating up her budget. The 28-year-old moved to Puerto Rico from New Jersey with her husband earlier this year, forcing her to slash her vacation spending to about $150 from last year’s $250.
“I’ll probably order a few things online and then have to go to a store at the last minute,” she said.
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