Inflation Pushing Consumers To Shop Earlier This Holiday Season, 40% Say It's A Major Factor

With inflation at a 40-year high and rising costs, consumers across the U.S. will likely grapple with their holiday shopping this year. 

The Consumer Price Index didn’t change in July and rose by 8.5% from the previous year. 

Gasoline prices declined by 7.7% in July, offsetting a 10.9% increase in food prices from July 2021 to July 2022. On the other hand, housing prices rose by 5.7% over the last 12 months.

Amidst all this, a recent Bankrate.com survey finds that 40% of holiday shoppers said that inflation "will impact their shopping decisions." 

At least 45% of people who earn under $50,000 in annual household income said inflation is changing their shopping habits, while 41% of shoppers who earn between $50,000 and $79,999 agreed with the sentiment.

“Holiday shopping will look different this year with inflation around 40-year highs,” said Ted Rossman, Bankrate.com’s senior industry analyst.

Only 33% of people whose salary is between $80,000 and $99,999 and 34% who earn $100,000 or more said their shopping behavior would change.

Meanwhile, winter holiday shoppers say they will begin their shopping for Christmas by Halloween. At least 50% said they would look for offers and deals by the end of October.

• "We believe that holiday again this year will start early," Macy's Inc M CFO Adrian Mitchell said at the Goldman Sachs Global Retailing Conference.

“Starting earlier could help because it gives you time to spread your cash flow and find the best deals,” Rossman added.

Holiday Shopping Trend

Another survey suggests that 59% of Americans are stressed about buying gifts this holiday season due to higher prices.

Close to 95% of holiday shoppers said inflation would change how they shop and are actively looking for ways they can save money. Nearly 59% of shoppers plan to buy fewer items, and 52% will pursue more coupons, discounts, and sales.

Also Read: Elon Musk Sees Deflation Coming If There Is Another Major Fed Rate Hike

About 84% of holiday shoppers said they plan to cut back and save money. Forty-one percent of shoppers said they would use coupons, sales, and discounts, 40% purchase fewer items, and 27% start shopping earlier.

One in five shoppers, or 21%, will buy cheaper brands, 17% plan to use credit card rewards to offset costs, and 17% will buy at stores with loyalty accounts or store-specific cards.

“I’m also a big fan of stacking discounts such as rewards credit cards, online shopping portals, and store coupons,” Rossman said. 

According to the survey, most or 54% of shoppers plan to use credit cards, with only 38% planning to pay off balances in full.

Half of the shoppers will use debit cards, 43% cash, 10% buy now, pay later services, and 7% will write checks - consumers were able to choose more than one answer.