Consumers are getting into the holiday spirit with plans to spend more this year than any previous year, according to an annual report by the National Retail Federation. The study found that the average consumer is preparing to spend $967.13 this year, an increase of 3.4% from the $935.58consumers said they would spend in 2016. Not all of that money will be spent on presents, but more than half, or $582.99, will go towards gifts for family, friends and coworkers. The rest will be divided between food, flowers, greeting cards and other non-gift holiday purchases.
To some families, spending that much money this holiday season may seem like a lot, but according to a study by Wallet Hub, some consumers in America’s biggest spending cities will spend nearly 1.5 times more than the national average this year. Wallet Hub calculated the average spending practices in 570 U.S. cities. In the top five cities, Naperville, Ill., Sugar Land, Texas, Bellevue, Wash., Sunnyvale, Calif. and Carmel, Ind., the average personal holiday spending topped $2,300. The cities where individuals were planning to spend under $100 this holiday were Rochester, N.Y., Brockton, Mass., New Britain, Conn., and Flint, Mich.
Whether shoppers plan to spend $100 or $1,000, they don’t plan to spend it all in one place. E-commerce and big-box retailers are expected to get the most traffic this year, according to NRF. About 59% of shoppers say they will make online purchases and 57% will do some shopping at a department store. The hottest categories of products are expected to be clothing and accessors (61%), gift cards (59%), books, music, movies or video games (44%) and toys (41%).
This is good economic news and shows a continuing steady rise in consumer confidence, said Matthew Shay, NRF President and CEO. “With employment and incomes increasing, consumers are more confident this year and that is reflected in their buying plans for the holidays,” Shay explained.
In the years after the 2008 Great Recession, retail spending was in a slump. Consumers’ concerns about the economy translated into fewer dollars spent. This year, only 27% of shoppers say their spending will be impacted by concerned about the U.S. economy. That’s down from 32% in 2016, when the uncertainty of the presidential election weighed on people’s minds, and it’s the lowest level since NRF began asking the question in 2009.
The big picture for holiday spending also looks positive. Approximately 164 million shoppers came out for Thanksgiving weekend, including Black Friday, Small Business Saturday and Sunday, and Cyber Monday. Overall, NRF is anticipating a 3.6 to 4.0 increase in 2017 spending over 2016. That means holiday spending in the U.S. could top $682 billion, up from $655.8 billion last year.