84.51°: Despite Inflation, Shoppers Intend to Splurge on Holiday Categories
With summer winding down, the holiday season is right around the corner. 84.51°, the Kroger-owned retail data firm, has shared new insights into consumer attitudes towards spending, gatherings and more as the season approaches.
In its 2023 Holiday Insights white paper, 84.51° found that shoppers are still expecting their holiday spending to be impacted by inflation, but are still willing to splurge on some items. 45% of Kroger shoppers surveyed believe inflation will “very much” impact their discretionary spending, an increase from 42% in 2022. Nearly four in 10 respondents (38%) said it will greatly impact travel plans and another 38% said it will greatly impact plans for going out to eat, both of which are also up from a year ago.
One in four shoppers (25%) said that holiday meal plans would be impacted by inflation, despite inflation falling year-over-year. According to the U.S. Bureau of Labor Statistics, inflation was 3.2% in July, compared to 8.5% last year.
Although shoppers expect their buying power to be impacted by inflation, they’re still planning to spend on certain items in the holiday season. Top categories where consumers plan to spend more include gifts (46%), seasonal or limited-edition snack items (44%), desserts (42%) and alcoholic beverages (35%).
For the upcoming holiday season, 93% of shoppers surveyed said they plan to gather with the same number of people or more than in 2022, while 18% plan to gather with more people. When hosting, 73% of customers said they will purchase brands/products during the holidays that are similar to what they typically buy. Just 14% will purchase brands/products that are less expensive, and 13% will purchase brands/products that are more premium. To save, more than half (52%) of respondents plan on using the same amount of coupons as last year, and 41% plan to use more coupons than last year.
When it comes to fulfilling holiday needs, 84.51° found that an increased number of shoppers will plan to shop in-store and online. While in-store is the preferred choice, 28% of consumers plan to shop omnichannel for cooking accessories, 24% plan to shop omnichannel for beverages, and 22% plan to shop omnichannel for appetizers.
“Recognizing that shoppers engage with brands through various channels makes it crucial to meet shoppers wherever they are,” said 84.51° in the white paper. “Retailers are undergoing a significant transformation as they embrace digital technologies to provide shoppers with a seamless and personalized experience. In-store digital screens, mobile apps and smart order fulfillment are key ways for brands and retailers to collaborate on making the holiday shopping experience easy and engaging for shoppers.”
The full 2023 Holiday Insights white paper can be found here.