Holiday Shoppers May Skip the Splurge Due to Inflation, Economic Worries
New York, NY, November 7, 2022-Many shoppers are trading down to less expensive clothing and accessories as inflation eats into their disposable income and a rocky stock market erodes their wealth, reports the Wall Street Journal.
“The downshift raises concerns about the coming holiday season, historically a time when many people splurge on designer handbags, fine jewelry and other extravagant purchases for themselves or loved ones
“‘I’m skipping the splurge this year,’ said Kate Cheng, who owns a jewelry store in San Francisco. Ms. Cheng said she normally treats herself to a designer handbag or another luxury item during the holidays but is holding off this year over concerns about a looming recession.
“She has noticed a shift in her customers’ buying habits in recent months to less-expensive silver jewelry from gold. That has prompted her to curtail her own spending. She switched to Uniqlo leggings instead of products from Lululemon, which cost about twice as much. She also canceled a trip to Maui, which would have cost about $4,000, and instead plans to take a road trip to New Mexico for about half the price.
“With inflation at a four-decade high, consumers have been trading down to less-expensive groceries and other necessities for the better part of this year. Now, with the stock-market plunge of recent months further eroding the wealth of middle- and higher-income households, the penny-pinching is extending to more discretionary purchases.
“Holiday retail sales in November and December, excluding spending on cars, gasoline and restaurants, is slated to increase between 6% and 8% from a year ago, after a 13.5% jump last year, according to the National Retail Federation, a trade group. The labor market is strong, and NRF expects some consumers will tap their savings and credit cards to deal with price increases.”