Spending cuts due to the coronavirus pandemic may continue throughout the holiday season, signaling that the most critical sales period for retailers could disappoint this year, according to Coresight Research.
The firm’s weekly U.S. consumer survey, which provides a detailed update on consumer behavior and sentiment amid the ongoing coronavirus crisis, found that about half of respondents expect to spend less for the holiday season compared to last year.
“Around half of the 15 product and service category options saw increases in consumers’ expectations to spend less than last year, versus four weeks ago. Non-retail services remain the top categories in which consumers plan to spend less than last year — more than half said they will spend less on dining out or going to bars/nightclubs. The proportion of consumers that expect to spend less on vacations jumped five percentage points from July 15, to 43 percent,” authors of the report said.
Specific categories such as seasonal decorations, toys and games ranked the top product categories that consumers plan to spend less on for the holidays, with the latter overtaking clothing and footwear this week, the authors noted.
“We asked respondents to think about their retail spending overall — so cutbacks in retail categories will reflect not just shoppers cutting gift spending but the effects of COVID-19 restrictions. For example, attending fewer or no parties, dining out less and working from home will all hit retail spending.”
And holiday spending has been pulled a bit forward: About one-third of holiday shoppers plan to do their shopping on Amazon Prime Day, which is significantly higher than those anticipating to shop on Black Friday or Cyber Monday.
“Recent announcements from major retailers to keep stores closed on Thanksgiving and Amazon’s postponement of Prime Day to October are expected to pull holiday sales forward. Some 23 percent said that they will start their holiday shopping earlier than usual this year, slightly down from 28 percent a month ago.”
But even as the holidays approach, consumers may still avoid public places — to date, avoidance remains above 80 percent for the fifth consecutive week.
“The proportion of respondents who are currently avoiding shopping centers/malls remained stable this week, after reaching a peak of two-thirds three weeks ago. Some 63 percent said they are currently avoiding these places. The rate has remained high at above 60 percent for a month now.”
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