DISCUSSION
Will travel keep retail’s 2022 holiday from taking off?
Written by RetailWire Staff
Photo: Getty Images/ferrantraite
This holiday season, customers might be more likely to head to an airport than a shopping mall. Thanks to an increased customer interest in traveling, some worry that retailers might find themselves with less foot traffic than they had hoped for.
Travel spending has been skyrocketing recently thanks in part to flexible office schedules making international travel more feasible for U.S. workers and extending it beyond the usual travel season, according to CNBC.
People are also traveling despite the increasing cost of plane tickets. The willingness to pay more may come down to pent up pandemic travel demand, along with the fact that travel plans for the holiday may have been made earlier in the year before some cost increases hit. Fears of a possible recession may also be encouraging consumers to take expensive trips, with people seeing it as their last chance to splurge on a vacation.
At the same time, credit card debt is already at a 20 year high and experts are anticipating much lower holiday spending than that seen in the past two years. The National Retail Federation contends that those spending on vacation will also spend on retail purchases like food, gifts and clothing.
While the travel data is not broken out by age group, the trend is in keeping with longstanding reports that Millennials are more likely to spend on experiences than products.
Retailers have other concerns as well going into yet another difficult-to-predict holiday season.
Year-long supply chain disruptions and the emergence of the omicron strain of the novel coronavirus during the 2021 holiday season prompted retailers to pack away inventory to the tune of $548.8 billion. Now as Christmas 2022 approaches, retailers have begun putting that product out on the shelves at a deep discount. This means retailers potentially making lower margins during the holiday or being stocked with outdated products.
Consumer confidence is also eroding in the U.S. as the holiday season draws closer, according to Forbes. Lynn Franco, senior director of economic indicators at The Conference Board said that consumer confidence receded last month, after having been on the way back up throughout August and September.