Will Santa place grocery gift cards under the Christmas tree this year?

Discussion
Sources: Whole Foods; Stop & Shop; Kroger; Publix
Dec 08, 2022

Gift cards have become an easy answer for people when shopping at the bookstore, the toy store and even Amazon’s “everything store” who want to avoid sticking a gift recipient with an item they have to return. Now thanks to this year’s inflationary economy, the gift card that is most appreciated might be the one from the grocery store.

Forty-three percent of consumers between the ages of 18 and 34 would rather receive a gift card for necessities like groceries than for something indulgent, according to a new survey from Givex reported on by Winsight Grocery Business.

As this is the first year Givex has done the survey, it does not allow for year-over-year comparisons. The findings could, however, still  inform strategies around the placement and promotion of gift cards in stores and online.

Some of the study’s other noteworthy findings about gift card purchasing behavior for this holiday season:

  • Fifty-one percent of respondents said that they planned to spend more than $100 dollars on gift cards this year, and 87 percent said they plan to spend some money on them;
  • Fifty-seven percent of respondents said they would be more willing to buy a gift card with a special promotion, like a discount or a free gift card with a purchase;
  • Forty-four percent of respondents said they would most prefer retail or restaurant gift cards, and 71 percent said they would most prefer open-ended credit card gift cards.

A new survey from InMarket found that 67 percent of its respondents planned to purchase a gift card in 2022 ahead of the holidays. Todd Morris, co-CEO of InMarket, said that the flexibility of gift cards helps customers ease the sting of rising prices in an inflationary economy.

Gift cards in general have been the most requested holiday gift for 15 years running as of a National Retail Federation (NRF) survey from last year. In fact, in 2021 they experienced a slight year-over-year increase in popularity, with 56 percent of respondents wanting one as a present, up from 54 percent in 2020.

DISCUSSION QUESTIONS: What do the findings about people preferring gift cards for necessities mean for grocery stores over the holidays? What other types of retailers do you think should emphasize gift cards in their marketing this year?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Paycheck to paycheck living is very much a real issue for many people and families. So yes, I think grocery and restaurant gift cards will be very welcome gifts."
"This research is as much a commentary about the enormous struggles young adults face as it is about retail trends."
"This feels a bit like opening a beautifully wrapped gift and finding a bag of socks. Yea I needed it, but it’s hard to get too excited about it."

Join the Discussion!

17 Comments on "Will Santa place grocery gift cards under the Christmas tree this year?"


Sort by:   newest | oldest | most voted
Dion Kenney
BrainTrust
1 month 25 days ago

This is more of a comment on the economy than about retail trends, but young adults are facing circumstances quite different from the past. High baseline costs for ordinary living expenses (rent, food, utilities, etc.) are extraordinary, and inflation is through the roof and with very little agreement on the cause or cure. While I wouldn’t recommend this being a desirable “steady-state” response, if gift cards help address this hopefully temporary problem, then it should be normalized. Hopefully rents at >40 percent of monthly earnings is not a permanent condition for this generation.

Bob Amster
BrainTrust

If grocery gift cards do become a serious (albeit temporary) gift item, the grocery chains will benefit by avoiding what might have been lost sales as consumers scale back on discretionary items and downgrade in quality.

Jeff Sward
BrainTrust

It wasn’t that long ago that I began to read about BNPL being used for the purchasing of everyday essential products. I took that as a sign that lots of people were living on the edge of monthly cash flow issues. Paycheck to paycheck living is very much a real issue for many people and families. So yes, I think grocery and restaurant gift cards will be very welcome gifts.

Gary Sankary
BrainTrust

This feels a bit like opening a beautifully wrapped gift and finding a bag of socks. Yea I needed it, but it’s hard to get too excited about it.

Ken Morris
BrainTrust

Gift cards are huge. I mean, yes, they’re exactly gift card size. But they’re big business, and especially good for retailers because the cash comes in up front. Recent studies show that almost half of U.S. adults are leaving money on the table with unused gift card credit in their wallets. A stack of cash doesn’t have a logo and festive holiday designs on it, though. If we’re going to go all in on the “practical” side of gifting, how about a gift card that tracks with inflation? You know, it’s pegged to the CPI. Lots of shoppers would just hold them until they think they’re worth double!

Really, is there anything more impersonal than a grocery gift card? Gift cards require zero thought and, to me, are a lazy person’s holiday gift. I think I would prefer coal over the grocery gift card, because at least I could heat my house with it. 

Craig Sundstrom
Guest

But Ken, at least gift cards are carbon neutral! 🙂 (Find a way to slip some hydrogen in the stocking, though, and your point is complete.)

Dave Bruno
BrainTrust

This research is as much a commentary about the enormous struggles young adults face as it is about retail trends. And sadly, I suspect giving gift cards for necessities will be with us for the foreseeable future. I think retailers of non-essential assortments can tap into this gift card market with creative promotions that involve gift card offers with purchase – including, if not especially, gift cards for other retailers that offer necessities.

Brian Cluster
BrainTrust

This is a key time for gift cards for grocers. Team members need to be aware of any promotional programs, understand how the cards are merchandised, and ensure that the gift cards are part of their customer communications. As this is a high-traffic time, it would be important to check the section daily and restock. Additionally, I also thought that if there was signage up for last-minute gift-giving ideas it would help the procrastinating shoppers and add items to baskets.

Neil Saunders
BrainTrust

In past periods of economic challenge we have seen gifts of cash and gift cards rise. I expect a similar pattern will play out this year. This is practical for receivers who can get things they really need, and it is practical for givers who know their gift will be useful rather than something unwanted.

KarenBurdette
Guest

With inflation and the high cost of rent, food, and utilities for young adults, I would imagine gift cards for necessities may be a longer than desired and growing trend that bleeds into next year for other occasions such as birthdays and graduations.

“Splurge” or luxury types of retailers as well as travel companies should emphasize gift cards in their marketing this year because though some may not buy those items for themselves, the wait to get those items could be shortened by a gift card.

Mark Self
BrainTrust

It means that grocery stores will sell a lot of gift cards! Pharmacy retailers are the other logical category, then Best Buy, then Hardware chains.

Get ready to open a lot of envelopes…

Rich Kizer
BrainTrust

Grocery gift cards under the tree? Every grocer should have gift cards promoted at checkout. This is one card that will not be set aside for future redemption. Why would a grocer not jump at this foot traffic builder? And most retailers know that gift cards ARE very frequently used for more than face value. .

Jeff Weidauer
BrainTrust

Grocery gift cards will be the best thing under the tree for many this year, given the inflationary environment.

David Slavick
BrainTrust
Gift cards are the perfect gift, especially for those difficult to satisfy or loathe to share their wish list. All retailers should emphasize (and do) gift cards to generate traffic. Even car wash chains offer a bonus $25 when you buy $100 (or 4 $25 gift cards). Restaurants do the same to capture brand preference, leading to a dining occasion (one that would happen anyway) and still offer the same type of incentive of $25 free for every $100 purchased. There is a lack of “feeling” when giving a gift card and yet if you buy a VISA gift card it serves the purpose of cold hard cash, but you have to pay a service fee on top of the face value. Placing a “free” gift card in a direct mailer to drive traffic into the store, or a bounce back card with a pre-set value post holiday purchase can get your 1st Quarter sales off to a favorable start. One guideline to follow — NEVER give points in a loyalty program for gift card… Read more »
Craig Sundstrom
Guest

My gift to the world this year will be to spare it my annual anti gift card rant — Ken covered the bases … quite well! — but I will point out getting a, say, $50 or $100 card for a store where you routinely spend thousands of dollars is relatively less impactful for the retailer than one where you spend little (or maybe don’t visit at all). Which is the long way of saying, I would think every (other) retailer would more logically promote these, than grocers.

Brad Halverson
Guest

For those who receive gift cards for necessities, this is such a great time to combat inflation and feel good about having enough to relax and buy groceries without worry.

For grocers who have differentiated themselves from other stores, the opportunity is to promote gift cards to taste and try something they haven’t before, whether a higher end cut of meat, wine, local products or kitchen tools.

William Passodelis
Guest

The grocers should attack this head on and try and benefit! What a better gift for someone living paycheck to paycheck than the gift of food?

wpDiscuz
Braintrust
"Paycheck to paycheck living is very much a real issue for many people and families. So yes, I think grocery and restaurant gift cards will be very welcome gifts."
"This research is as much a commentary about the enormous struggles young adults face as it is about retail trends."
"This feels a bit like opening a beautifully wrapped gift and finding a bag of socks. Yea I needed it, but it’s hard to get too excited about it."

Take Our Instant Poll

How likely are the sales of grocery gift cards this holiday season to increase substantially over 2021?

View Results

Loading ... Loading ...