From CNBC: 2024-10-19 09:00:01

The holiday season is fast approaching, but retailers are facing uncertainty even with a decrease in inflation. Various factors, such as volatile weather, a deal-seeking mindset among shoppers, and fewer days between Thanksgiving and Christmas, will impact consumer spending. However, shoppers are feeling optimistic and plan to spend more this holiday season.

Holiday spending is forecasted to increase by 2.5% to 3.5% compared to last year, totaling between $979.5 billion and $989 billion. Shoppers plan to spend an average of $1,778 during the holidays, which is 8% higher compared to last year. Consumer sentiment is buoyed by low unemployment, more typical inflation levels, and a recent interest rate cut by the Federal Reserve.

Shoppers will be on the lookout for early deals this holiday season, with nearly 80% saying they will participate in deals events in October and November. Consumers are expected to spend 16% more on experiences but 3% less on gifts compared to last year. Spending in non-gift categories like decor and party apparel is expected to rise by 9%.

The upcoming presidential election is a major concern for retailers as it may impact consumer spending during the holiday season. The election, set for Nov. 5, could delay shoppers’ willingness to make purchases if the race is close and results are prolonged. Retailers like Walmart and SharkNinja are closely monitoring the election and its potential effects on consumer behavior.

Weather plays a critical role in influencing holiday shopping behavior. Cooler temperatures can boost sales of winter apparel and gifts. While early fall weather was warmer than usual, colder temperatures in late fall and winter are expected to drive shoppers to buy seasonal items. Hurricane damage in some regions may redirect funds from gifts to other necessities like home repairs.



Read more at CNBC: elections, hurricanes to affect retail spending