According to KPMG’s annual holiday shopping survey, retailers can look forward to a great holiday season as household spending and holiday spending trends up.
While the company acknowledges spending during the pandemic fell alongside consumer sentiment, nearly half of its consumer survey respondents reported that their household income is either already back to pre-COVID-19 levels or will be back to pre-COVID-19 levels within the next six months. In part, KPMG cites returning employment levels for the rise in spend, finding that 83 percent of survey respondents with jobs that were most impacted by COVID-19 say they are now back at work, compared to 65 percent in September 2020. And more than half, report that their household incomes have returned to pre-pandemic levels with an additional 12 percent saying that their income has surpassed those levels.
With this in mind, the company estimates a 5 percent increase in consumers’ holiday shopping budgets from last year and anticipates a 7 percent increase in holiday sales growth for retailers.
“Positive outlooks on the economy, employment, and household spending bring a lot of optimism to the 2021 holiday shopping season,” said Matt Kramer, national sector leader, consumer and retail, at KPMG LLP. “Consumers are expected to start early and continue to increase online purchases.”
Notably, one category that stood out in the report was jewelry, with 41 percent of consumers saying they plan to spend more on these items.
Unsurprisingly, the company’s pulse report indicates that online shopping will continue to accelerate and reach record numbers this season, however, also predicts consumers will find a balance that includes shopping in-store. KPMG’s survey found that 32 percent of consumers plan to shop in-store on Black Friday, which authors of the report say is poised to be the most important event of the holiday shopping season in 2021.
“After having its future relevance questioned last year, Black Friday makes a strong comeback securing its top spot as the most important shopping event of this holiday season,” said Scott Rankin, national advisory and strategy leader, consumer and retail, at KPMG LLP. “As nearly one-third of consumers surveyed have definite plans to shop in-store that day, the search for deals pairs nicely with increased holiday spending budgets.”
Still, KPMG’s report finds that despite overall consumer optimism for the 2021 holiday shopping season, shoppers are worried about their ability to get products in time. More than half of the survey’s respondents said they are at least somewhat concerned about stockouts in stores and shopping delays.
Notably, these sentiments align with KPMG’s recent executive retail survey which found 82 percent of retail executives saying they were “somewhat” to “very concerned” about inventory shortages.
FOR MORE WWD BUSINESS NEWS: