The combination of low unemployment, low gas prices, low interest rates and unprecedented options could see spending rise as much as 6%, according to a new forecast.
Holiday sales are expected to increase between 5% and 6% this year, with a bias toward the upside of that range, according to JLL. That makes the professional services firm focused on real estate and investment management a bit of an outlier as most other forecasts from trade grounds and consultants have been in the 4% range.
“As we head into the holiday season, consumer confidence is the highest it’s been in nearly 17 years. We expect that holiday spending will mirror overall retail sales trends, and anticipate that sales growth could reach as much as a 6% jump due to favorable economic conditions and the strength of the labor market,” according to JLL CEO Greg Maloney.
Whether consumers plan to shop before or after Thanksgiving, they still plan to spend, plenty. The average budget for gifts this year is approximately $740, with another $150 budgeted for holiday décor, according to JLL’s survey of nearly 2,500 shoppers. Naturally, there is a direct correlation between income level and annual holiday budget. High income shoppers plan to spend more than three times as much as lower income brackets. Of special note is data showing that Gen Xer’s have now surpassed Boomer’s as the biggest spenders, with an average of $800 budgeted for gifts this year.
Another JLL finding is that physical stores outrank digital as top shopping destinations. Almost 40% of consumers surveyed will shop at more than six stores this holiday season. Nearly two-thirds of shoppers indicated they will shop at superstores this year, while only about 44% will shop online for holiday gifts. Other popular store choices include department/apparel or accessories stores (48%), electronic/toys or game stores (35%) and bath/beauty or cosmetic stores (31%).
“Consumers who plan to do the majority of their shopping online will still venture out to physical stores either to pick-up purchases ordered online, or buy high-end items they want to touch and test,” according to James Cook, JLL’s Director of Retail Research.
The majority of women surveyed plan to head to toy stores (54%) and department stores (53%) for gifts. They prioritize low prices above any other factor, while wide selection and convenient location tie for the second most important factor. These factors make them especially eager to turn to social media (62%) and retailer emails (62%) for shopping inspirations, according to JLL.
Conversely, the majority of men surveyed are stocking up on big ticket items at jewelry stores (75%) and electronic stores (62%). When choosing where to shop, men are more likely to prioritize customer service and product experts. Men surveyed tend to rely on word-of-mouth in deciding where and what they will buy this holiday season.