Across Oahu, businesses and shoppers were preparing for what some were expecting to be a busy Black Friday.
Malls across Oahu were closed for Thanksgiving, giving retail workers a brief respite. But retailers are hoping to bring in customers throughout the weekend with deals.
But consumers across the country are approaching this holiday season cautiously.
Christina Beck, a 58-year-old administrative director at a school, makes lists of gifts she plans to buy for her family and friends and sticks with it. But her spending this year will be kept in check by the high cost of food in grocery stores and restaurants, and the mortgage for a home in Minneapolis she bought in 2022 with her best friend.
That best friend, Kristin Aitchison, cannot wait for the holidays. Aitchison, 55, who works for a senior living home, advises her family each year that she plans to make the holidays smaller, spending less. And every year, she spends more than she did the year before.
“I’m a huge gift giver,” Aitchison, who started her shopping in early November. “I have so much joy in giving gifts. I’m always running around the last week before Christmas because I have to find just a few more gifts.”
There are many reasons for people to be more prudent in their holiday spending this year. While inflation is less rapid than it was a year ago, millions of shoppers still feel sticker shock when buying groceries. Payments on federal student loans, which were on pause during the pandemic, have resumed. And higher interest rates have meant larger credit card bills and, for homebuyers, mortgage payments.
Yet consumer spending has been surprisingly strong throughout 2023. For retailers the question is whether people will continue to spend their way through the holiday season or decide this is the time to pull back.
The National Retail Federation this week released an annual survey that concluded that an estimated 182 million people planned to shop in-store and online from Thanksgiving through Cyber Monday across the country this year. That’s 15.7 million more people than 2022 and is the highest estimate since NRF began tracking this data in 2017.
According to the survey, 74% of holiday shoppers plan to do so during the five-day Thanksgiving holiday weekend. This is up from 69% pre-pandemic, in 2019. According to the survey, Black Friday continues to be the most popular day to shop, with 72% of respondents planning to shop — up from 69% in 2022.
But according to WalletHub’s 2023 Holiday Shopping Survey, as many as one-third of respondents said they are forgoing gifts this year due to inflation, and nearly a quarter said they still had debt from last holiday season.
In another survey by the Conference Board, a nonprofit research group, consumers said they planned to spend an average of $985 on holiday-related items this year, down from the $1,006 they anticipated spending in 2022.
The resumption of student loan payments is also prompting some to rein in holiday spending. In a survey by consulting firm Deloitte, 17% of respondents said they had to resume student loan payments, and almost half of them said that would affect their holiday spending.
In past years Tara Cavanaugh, a 37-year-old marketing manager, spent as much as $1,500 on gifts for her family, friends and various office parties, she said. This year, after a move with her partner to Boulder, Colo., and the resumption of her $400-a-month student loan payments — her partner also has student loan debt — she said she was paring down her gift list and expected to spend closer to $200.
“We both make decent incomes and live simply, sharing an old car, and our furniture is still from Ikea, but it still feels like we’re struggling,” Cavanaugh said of her and her partner. “I know a lot of us are feeling the pinch, so I’m not going to freak out about giving gifts to people who are older than me, are doing fine and don’t need anything.”
The national unemployment rate has risen over recent months, and wage growth has slowed. Last week the U.S. Department of Commerce reported that retail sales nationwide fell 0.1% in October from September, the first drop since March.
One closely watched early indicator, Amazon’s Prime Day in October, showed consumers were spending more, but only slightly. They spent an average of $144.53 on Prime Day, a 2% increase from the average the year before, according to Facteus, which analyzed credit and debit card transaction data.
Last week the Commerce Department reported that retail sales nationwide fell 0.1% in October from September, the first drop since March. Executives at Walmart also warned that consumer spending had weakened in the last two weeks in October, noting that people seemed to be waiting for sales.
“It makes us more cautious on the consumer as we look into the fourth quarter,” John David Rainey, chief financial officer of Walmart, said in an interview. “I think there’s likely more variability in the numbers.”
Still, the retail sales pullback was smaller than the decline that many economists had expected after a strong summer of spending, and some analysts saw it as a sign of continued consumer resilience.
Holiday sales are likely to be decent by pre-pandemic standards, though not as strong as the gangbuster seasons in 2020 and 2021, said Tim Quinlan, a senior economist at Wells Fargo.
Higher-income shoppers still have plenty of extra savings built up during and after the pandemic, but those with lower incomes have more fully used up their resources, Quinlan said. Higher interest rates might also deter shoppers from putting holiday shopping on credit cards. The combination of reduced savings and higher rates “makes it tougher to have a big pile of presents under the tree this year,” he said.
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New York Times writers Julie Creswell, Jeanna Smialek and Jordyn Holman, and Honolulu Star-Advertiser staff writer Keven Knodell contributed to this report.
