According to a survey by Jefferies, 50% of consumers in the US plan to spend more on back-to-school shopping this year, with 70% citing inflation as the primary reason for increased spending, particularly on apparel; Walmart's private label business is expected to benefit from this trend.
U.S. consumers have significantly reduced their spending over the past six months and plan to continue doing so during the upcoming holiday season, with the majority cutting back on non-essential items and essential items.
The economic backdrop faced by Gen Z, including inflation and high living costs, is expected to have a deep impact on their pay expectations and spending habits, potentially pushing prices higher. Young people in the UK have seen their inflation expectations rise significantly, driven by experiences of a cost-of-living crisis during their formative years. This could have long-lasting psychological and economic effects on Gen Z and society as a whole.
Around 74% of American holiday shoppers expect their gift spending to remain steady or increase compared to last year, with 55% anticipating equal spending and 19% planning to spend more, while 26% anticipate spending less, according to a survey by Shopify and Gallup. The survey also revealed that 78% of 18- to 29-year-old shoppers expect to spend at least as much as last year, and online shopping is projected to be popular, with 93% planning to make holiday purchases from online retailers.
Spending by teens has decreased by 1% year-over-year and about 4% from the spring, with high inflation being a major concern and teens relying more on their parents and spending less, leading to predictions of a highly promotional holiday season.
Seventy-three percent of Gen Z consumers in the US have reduced their spending due to inflation, with many choosing to cook at home, spend less on clothes, and cut down on groceries, while older generations have increased their spending, according to a Bank of America survey.
Generation Z is cutting back on spending in response to rising inflation, with nearly three in four Gen Zers cooking at home, spending less on clothes, and limiting grocery purchases to essentials, according to a survey from Bank of America.
Consumers are expected to spend an average of $1,652 on holiday-related purchases this year, up 14% from last year and surpassing the average spent in 2019, with non-gift purchases like decorations and home furnishings expected to see the biggest increase, according to a new report from Deloitte.
Despite inflationary pressures, American consumers continue to spend, with September's sales reaching $704 billion, a 3.8% increase from the previous year, indicating a healthy consumer outlook for the upcoming holiday season.
Millennials and Gen Z consumers represent a valuable market, with brands using social media to target them and appeal to their purchasing power, according to a TD Cowen report. Surveys showed that value and cutting spending are important to these generations, with Amazon and Google playing significant roles in their path to purchase. The current economic environment has shifted consumer behavior towards seeking value, while sustainability remains a relevant factor, especially among younger consumers. However, higher interest rates, borrowing costs, and inflation are potential headwinds for these consumer groups.
Consumer spending in the US is expected to remain strong during the holiday season, despite economic headwinds such as inflation and student loan bills, with surveys indicating that a significant percentage of people plan to spend more on holiday shopping compared to last year. However, lower-income consumers may be more cautious and deliberate in their spending.