Will Americans give the gift of nothing this holiday?
Much of the focus of retailers’ concerns about the upcoming holiday season has centered around being unable to meet customer demand for gifts, and losing out accordingly. Retailers, however, may be facing a different problem. New research finds that many customers are not planning to buy gifts at all for the 2021 holiday season.
One in four shoppers are planning on foregoing holiday presents this Christmas season due to COVID-19, according to WalletHub’s “Coronavirus and Holiday Shopping Survey.” Sixty-nine million consumers think they will spend less on the holiday than they did last year.
These findings could be the result of a number of factors.
While the U.S. economy has recovered to some extent from the precarious state that began with the lockdowns of March, 2020, this year the consumer marketplace has experienced waves of price increases, which may make customers more wary of spending on gifts.
Last week, inflation in the U.S. rose to a 30-year high, according to CNN.
Federal COVID-19 stimulus has also come to an end, which means less disposable income to spend on non-essentials like holiday gifts, although some U.S. states have begun implementing additional stimulus payouts and extended benefits for those who continue to be financially impacted by the pandemic.
The ongoing pandemic and the perception that it could continue to be a concern indefinitely may also be putting a damper on the festive mood associated with holiday gift giving. Fifty-three percent of WalletHub survey respondents said they would pay extra for “peace and quiet” this holiday season.
Not needing to meet an outsize demand for gifts could give retailers a bit of breathing room this season, though, given the difficulties securing products for their shelves.
Supply chain disruptions, resulting from bottlenecks in overseas shipping and labor shortages preventing product from being moved from ports, have led to ongoing issues with out-of-stocks throughout 2021.
There have also been segment-specific supply chain problems. In technology, for instance, there has been an ongoing shortage of computer chips which some expect to extend into 2022.
- Coronavirus and Holiday Shopping Survey – WalletHub
- US inflation rate hits 30-year high – CNN
- 4th Stimulus Check Update: The states still giving out stimulus checks – Marca
- How bad will product shortages get this time? – RetailWire
DISCUSSION QUESTIONS: Should retailers be concerned about shoppers skipping out on gift giving this year? In what ways might retailers be able to mitigate losses sustained if holiday gift giving is lower than normal?