Holiday Shoppers Are Looking for Value This Year

The 2022 holiday season could be a leaner one, with price-conscious shoppers hunting for value and nearly half planning on spending less than last year, according to a survey by Goldman Sachs Research. 

GS Research surveyed 1,000 US consumers about their plans for holiday shopping. Only 31% said they would spend more than they did last year, while 23% said they would spend the same amount and 46% indicated they would likely spend less. 

Inflation—and the higher prices it brings—is clearly weighing on consumers; the survey captured a four-year high in respondents saying that they think holiday gift prices are more expensive this year (79% said so, compared with 74% last year and only 46% in 2019). Nearly half of shoppers surveyed – 46% – said they were planning to trade down to lower quality items to stretch their dollar further.

How tight shoppers plan to be depends on who you ask. Women indicated a preference to be more cautious than men; 52% of women are planning to spend less this year compared with 40% of men. Gen-X consumers are most likely to spend less this year while Gen-Zers are most likely to spend more. Rural shoppers were more likely to say they will cut their spending this year; 51% said they would spend less versus 45% of urban and suburban shoppers.

Another key factor driving the holiday season is timing. Survey results indicated consumers are starting to shop later than they did last year but also putting greater emphasis on Black Friday. Nearly 30% of consumers said they were planning to complete their holiday shopping during Black Friday sales (vs. 25% in 2021), and 60% said they are planning to complete their shopping by the first week in December.

The survey also captured some expected rebounds in categories and channels affected by the pandemic. Experiential gifts -- things like classes or travel experiences – were among those that suffered the most through Covid but that seem to be normalizing, according to this year’s survey. And while online shopping is still likely to capture the largest share of holiday gift spend, shoppers are also returning to brick-and-mortar stores. GS Research noted that online retailers in aggregate have lost implied share of holiday spend this year while some physical stores have gained, namely retail formats that focus on discounts.

“We expect consumers to hunt for promotions this holiday period,” the GS Research team wrote, highlighting the appeal of large retailers in the discount and club shopping categories. “Net, we expect a dynamic holiday season with strength in select sub-markets driven by contracting holiday dollars and channel preference shifts back to physical retail.”