Ongoing concerns about the economy and inflation will negatively impact consumer spending in the upcoming winter retail season, according to new data from The NPD Group.
In the research group’s 2022 Holiday Retail Outlook, reflecting online survey results from 3,599 adult respondents, consumers plan to spend less on holiday shopping than they did in 2021, impacting most key categories. More consumers have negative perceptions of the economy and personal finances, the lowest seen in recent years, according to NPD.
Specifically, consumers plan to spend an average of $760 on holiday shopping this year. That’s higher than $691 in 2020, but below 2021 spending of $785.
Regardless, there’s good news for consumer electronics and entertainment categories. Both rank among the top 10 coveted consumer categories, with entertainment No. 4 generating $178 in mean individual consumer spending, trailing No. 1 consumer electronics with $765 in consumer spending.
Similar to other consumer surveys, most respondents will begin their winter holiday shopping over the Thanksgiving weekend, with Black Friday (Nov. 25) is still the top time for finding the best deals, followed closely by pre-November dates such as Amazon’s just concluded Prime Day promotion.
Notably, NPD contends that online shopping will see its first major decline this holiday season. The research group found that 80% of respondents plan to engage in e-commerce, which is down from 85% in 2021, but equals pandemic-impacted 2020.
Despite rising prices on nearly all everyday expenses, the U.S. consumer continues to spend on general merchandise products, according to NPD. Through the first nine months of 2022, retail sales revenue was just 2% below the elevated 2021 levels and 17% above pre-pandemic 2019 results.
Year-to-date unit sales declined 8% compared with last year. However, consumers’ appetite for product appears to be normalizing with demand just 3% below 2019.
“Throughout 2022, we have witnessed the stretching of traditional retail shopping periods and a flattening of typical retail sales peaks,” Marshal Cohen, chief industry advisor for retail at The NPD Group, wrote in the report. “The consumer’s here-and-now shopping mindset adopted during the pandemic, combined with enduring and expanding price elevation, has resulted in a careful prioritization of spending with a clear focus on needs.”