’Tis season for holiday jollies — and inflation jitters
Buyers expecting to shop earlier but spend more
Holiday shopping this year will be a double-edged sword: consumers in Houston and across the nation will spend more only to get less, according to survey data by Deloitte.
Houstonians say they plan to spend an average of $969 on retail shopping this holiday season — more than the $856 they planned to spend last year and more than the $880 holiday shoppers nationwide said they would spend on average in 2022. But with that money, they plan to buy only nine gifts on average, compared to 17 gifts last year.
The answer to both issues is inflation. Over half of Houston shoppers who plan to spend more this year expect to do so because of higher costs. Nearly 70 percent of surveyed shoppers who plan to spend less also cited inflation as the cause — a trend mirrored in national data captured by Deloitte.
While consumers around the nation are affected by rapidly rising inflation, the Southwest is the only region where holiday spending is expected to increase this year, according to Deloitte's survey. That doesn't mean the region will spend the most — consumers in the West are expecting to spend nearly $200 more on average. But the Southwest is making a comeback from particularly harsh hits to consumer's wallets, according to Tony Torres, audit leader for Deloitte's Houston office.
“There's been stimulus checks, there's been interest rate hikes — you've got a lot of stock market swings. And in addition to that, you've got things like natural disasters, hurricanes and social unrest. All of these things impact customer behavior,” Torres said. “So the spending that we're seeing right now, while significantly greater than what we're seeing nationally, is part of a normalization.”
Shopping earlier and in-person
The trend of holiday shoppers heading to stores earlier in the season also will continue this year. Over 40 percent of Houstonians said they're likely to start shopping earlier this year than last year, with 22 percent of holiday spending expected to occur before Halloween. Shoppers will spend another third of their budgets in November, compared to just a quarter last year.
National retailers such as Amazon Prime, Walmart and Target have launched their holiday sales earlier than ever, with Woodlands-based homegoods retailer Conn's launching Black Friday ads online in October. And the effect is trickling down to local retailers as well, according to Jonathan Zadok, partner at local watch and jewelry retailer Zadok Jewelers.
“Big box retailers have definitely helped train people to start holiday shopping season early by making the season top of mind much earlier,” Zadok said.
Stores at Memorial
City Mall also haveseen increased foot traffic earlier than expected.
The locations for both Francesca's — a Houston-based clothing and accessories retailer — and franki — the company's brand for younger teens — have seen increased demand in October, according to Chris Kaighn, the company's senior vice president of boutiques, real estate and strategic partnerships.
Earlier this month, the Macy's in Memorial City opened up a Toys R Us location on its second floor.
Customer response has been strong, according to Macy's store manager Leon Gongre, with customers of all ages shopping products the store's colorful shelves.
Still, many shoppers are saving big spends for Thanksgiving week — 35 percent of Houstonians said they plan to shop on Black Friday, and 30 percent will flock to online retailers on Cyber Monday. The share of consumers shopping online stayed about the same — 62 percent — but with vaccines and booster shots abound 37 percent of Houston shoppers will also visit their favorite stores in person, compared to 32 percent last year.
Making holiday count
With inflation near 40-year highs and mortgage rates topping 7 percent for the first time in 20 years, the economic outlook for most consumers is grim. In Houston, 40 percent of shoppers say their financial situation is worse than it was last holiday season, and 42 percent expect it'll only get worse from here.
But Houstonians are determined to make this holiday season as festive as they can — even moreso than the rest of the nation, Torres said.
Nationally, spending on non-gift holiday purchases — such as home decorations and holiday sweaters for the family — is down by 12 percent, according to Deloitte. But in Houston, it's expected to increase by 9 percent this year.
“Houston is a very resilient city,” Torres said. “This data is telling me that shoppers in Houston are all about making this holiday count because of some of those concerns they see in the forecast down the road.”