Main menu

Pages

Vacation procrastinators are back with a vengeance. Blame inflation.

featured image

NEW YORK (AP) – Last year, Lucila Gomez and her husband started their holiday shopping close to Thanksgiving and finished a week before Christmas, spending $750 on tablets and clothes for their three children and relatives.

This year? Gomez is waiting until she gets her annual bonus on Friday to get started — and she’s capping her spending at $200, sticking to World Cup-themed T-shirts for her 10-year-old twins and one 6-year-old.

“Last year we were confident. We were like, ‘Take what you want,’” said Buckeye, Arizona, 49, an hourly worker in the billing department of a healthcare company. “This year, we are waiting until both are paid. We want to enter the New Year without owing anything.”

Last-minute holiday shoppers are back with a vengeance — and inflation is partly to blame.

In the first two years of the pandemic, many shopped at the beginning of the season, afraid of not getting what they wanted due to lack of products or delays in deliveries. They also had more money to spend thanks to government stimulus checks and childcare loans.

But this year, supply chain bottlenecks have eased and shoppers aren’t so much concerned about availability as they are about higher prices on everything from rent to food, causing them to put off buying until the last minute.

Gomez, for example, said that while she and her husband, an electrician, got a raise, it still wasn’t enough to offset rising expenses. In fact, she said her family moved in with her parents after their monthly rent jumped from $1,500 to $2,000 earlier this year. She was hoping to save up to buy a house, but mortgage rates keep rising.

Last-minute shopping is also being spurred by a quirk in this year’s calendar, according to Brian Field, global leader at Sensormatic Solutions, which tracks in-store traffic. With Christmas falling on Sunday, consumers have all week to shop.

Retailers are counting on last-minute spending to help hit their holiday sales targets after a weaker-than-expected November.

Americans slashed retail spending sharply last month as the holiday shopping season kicked off with high prices and rising interest rates hurting households, particularly low-income ones.

Retail sales fell 0.6% from October to November, after a sharp increase of 1.3% the previous month, the government said last week. Sales fell at furniture, electronics and home and garden stores.

Americans’ spending has been intact since inflation first spiked nearly 18 months ago, but shoppers’ ability to sustain spending in a period of high inflation may be starting to wane. Inflation has retreated from the four-decade peak it reached this summer, but it remains high enough to undermine consumers’ purchasing power.

Still, overall year-end sales should be decent, although year-end sales growth is expected to slow dramatically year-on-year.

The National Retail Federation, the country’s largest retail group, is expected to release actual results for the combined November-December period next month. The group expects holiday sales growth to slow to a range of 6% to 8%, compared with 13.5% growth a year ago.

The last stretch of the holiday season is critical.

On average, the 10 busiest shopping days in the US — which include Wednesday, Thursday, Friday this week and Monday next week — account for about 40% of all holiday retail traffic, according to with Sensormatic. However, retailers can expect even higher numbers this year as high gasoline prices force consumers to consolidate their shopping trips and all converge in the coming days, Sensormatic said.

For those hoping for bigger discounts before Christmas, they might be disappointed. Retailers in general have maintained the same discounts they have been offering since Black Friday. There may be some deals, however, in areas like home and furniture, according to DataWeave, which tracks prices on hundreds of thousands of items at about three dozen retailers, including Walmart, Target and Amazon.

Recent data from DataWeave shows that average furniture prices were discounted by 23% during the second week of December, compared to 12.8% during Black Friday week. In home furnishings, average price cuts were 17.2%, compared to 11.2% in Black Friday week.

Krish Thyagarajan, president and COO of DataWeave, believes that electronics discounts are rising from Black Friday levels in the last few days before Christmas, but clothing price cuts are expected to remain just above 20% plus generous than last year’s average 16% discount at this time.

Inflation or not, there will always be perennial procrastinators like Evelyn T. Peregrin, who last year used COVID-19 as an excuse to delay her holiday shopping since several relatives had the virus, so she didn’t have to buy or deliver gifts until after of Christmas.

Now, it’s travel expenses of around $700 that are eating into his budget. The 28-year-old moved to Puerto Rico from New Jersey with her husband earlier this year, forcing her to cut her vacation spending to about $150 from last year’s $250.

“I’ll probably order some stuff online and end up having to go to a store at the last minute,” she said.

🇧🇷

Follow Anne D’Innocenzio: http://twitter.com/ADInnocenzio

🇧🇷

Comments