By Neil Saunders
Thanks to a strong economy and the gains from tax cuts and bonuses, consumers are entering this holiday season in a confident mood. Some 59.3% say that their personal finances are better now than they were at this time last year; comparatively, only 14.2% say that they are worse.
Buoyed by stronger finances, consumers are starting their holiday shopping slightly earlier, with 35.2% saying they will start after Halloween, up from 31.8% last year.
Because of these better finances, 52.2% of consumers feel very good or good about the extra expense associated with the holidays. Just under a quarter feel very bad or bad.
Just over half (51.8%) of consumers plan to spend more or a lot more during the holidays than they did last year. This is a significant number, especially since spending in 2017 was robust. Some 28.6% of consumers expect to spend the same as last year, while just 19.6% say they will spend less or a lot less.
These numbers are the strongest since we began recording holiday spending plans in 2012:
- 2012: 47.1% said they would spend more
- 2013: 44.9%
- 2014: 42.4%
- 2015: 40.7%
- 2016: 48.6%
- 2017: 49.2%
- 2018: 51.8%
Perhaps buoyed by stronger finances, consumers are starting their holiday shopping slightly earlier than in previous years. Just over 18% started their shopping at the beginning of fall (compared to 16.9% last year), and 35.2% say they will start after Halloween (31.8% last year). Only 20% will leave their shopping until December.
When it comes to what people are spending more on, gifts and presents lead the way with 58.7% saying they will budget more for this area than last year. Meals out of the home and holiday homewares come next – for each, over half of consumers say they will spend more.
Notably, holiday apparel is a winner this year, with 47.1% of shoppers saying they will spend more on clothing for the festive season than they did last year. This caps a good year for apparel.
Holiday home improvement leads the way in terms of categories people say they will spend less on. That said, a relatively small 36.3% say they will budget less, so it is far from a majority.
Neil Saunders is managing director of research firm GlobalData Retail.