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Nearly half of consumers starting holiday shopping before November: RPT

Katherine Cullen, NRF Senior Director of Industry and Consumer Insights, joins Yahoo Finance to discuss consumer spending plans this holiday season.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back. Americans are ready to celebrate and spend this holiday season, despite the ongoing pandemic. Here to break down their new holiday survey is Katherine Cullen, senior director of industry and consumer insights at the National Retail Federation. Katherine, glad to have you here on the show. You know, this week, we had our All Markets Summit, and I got to interview the CEOs of Lululemon and Sam's Club. And each of them told me that people are out shopping for the holidays earlier than ever. Is that what your survey is showing as well?

KATHERINE CULLEN: Absolutely. We are seeing record numbers of consumers saying that they're already shopping. Over half of consumers are expecting to shop before November, which is up from last year and is certainly up from a decade ago. Or right around half, at 49%, are starting their shopping. Consumers, we know, like to spread out their budget. They like to get a headstart on the holidays. And this year, in particular, they want to avoid the stress of last minute shopping and get items in case things might sell out.

KARINA MITCHELL: And what are some of the things that they're looking to buy? Because there's so much, whether it's pent-up demand or they're flush with cash. They're ready to spend this money, but what are they shelling it out on?

KATHERINE CULLEN: Well, we're looking at a lot of the same categories that are top of mind for consumers every holiday season. Things like gift cards are always a big category, apparel, electronics, toys. Certainly, home has been a big sector for consumers over the last several months, but really concentrating on that gifting category, as well as decor. And then, of course, consumers may pick up other items to treat themselves or their families.

ALEXIS CHRISTOFOROUS: Talk to us a little bit about how people are shopping this year. I mean, this time last year, because of the pandemic, it was really a push online. Are more people moving into actual brick and mortar stores to sort of check out the items before they buy?

KATHERINE CULLEN: Absolutely. We are seeing a lot of interest in in-store shopping. We know that it's particularly key around the holiday season. People like to touch and feel those gifts, see them in person, before making the actual purchase. We are seeing the percent of consumers who plan to shop online this year is very much on par with pre-pandemic levels. A little over half plan to shop online during the holiday season, down from last year, which was around 60%.

And this is carried out in retail sales as well from the census, where we are seeing retail sales, the percent that are attributed to online and other non-store has settled back down. It's a little higher than where it was before the pandemic, but just a couple of percentage points and certainly down from its peak in the early part of the pandemic during all the shutdowns.

KARINA MITCHELL: And then we're also seeing so much with supply chain issues and delivery headaches as well. Are we seeing a lot of bargains and deals that suppliers are putting out, that retailers are putting out to attract customers? Or are they worried that, you know, they're going to put out these deals and then maybe run out of inventory or run out of the right size or stock?

KATHERINE CULLEN: Well, we do have to remember, these supply chain disruptions have been impacting the industry, really, since the start of the pandemic. They've manifested themselves in a couple of different ways. But retailers have continued to deal with ongoing, as well as new, supply chain challenges.

From talking to our members, we are hearing that they are planning to offer promotions and deals during the holiday season. It's part of their strategy. As we've seen in the past, many of those deals are becoming more targeted. You might see more things like flash sales, buy one get one type of promotions. But they do know that that is a big attractor for consumers during this time of year. And they are certainly planning it into their strategies.

That said, we know inventory is a concern right now. Most of our members feel that they have-- they're in a fairly solid place with products in stock or on their way. They've moved up their shipping timelines. But that is certainly something causing a little more stress this year, both for consumers and for the industry.

ALEXIS CHRISTOFOROUS: And Katherine, how about how much people are planning to spend on gifts or anything holiday related? Because we have so much pent-up demand, because so many people weren't out shopping or traveling or spending money in their usual ways during the pandemic, are they just going to go really big and spend this time around?

KATHERINE CULLEN: Well, we actually saw really strong spending around the holidays last year. If you'll recall, retail sales for November and December were actually up 8% year over year. Consumers, from everything that we have seen, wanted to make these occasions feel special. They were in a fairly solid place in many cases through efforts like stimulus. Now, of course, we're in a little bit of a different place, but we are seeing consumer confidence has come back up again. Consumers are in a fairly good place when it comes to their own pocketbooks, on average, at least.

And we are seeing that the average consumer plans to spend nearly $1,000 on gifts, decorations, food for hosting, as well as other items to treat themselves or their families. And we're seeing some consumers, particularly in the 65 and up category, increasing what they plan to spend on gifts this year, perhaps because they can get together with family, maybe see grandkids they weren't able to see last year. So there's a lot of emotional elements factoring into how people are approaching the holidays this season.

ALEXIS CHRISTOFOROUS: All right, Katherine Cullen, senior director of industry and consumer insights there at the National Retail Federation, thanks for joining us today.