We don't often think of the holidays as a time to be frugal. Most of us have families to visit, dinners and special events to host, and gifts to give — all activities that can make wallets considerably lighter.
This holiday season, however, those gifts may be less extravagant, or at least more carefully selected. Purchasing Power's 2023 Consumer Holiday Spending Survey found shoppers earning less than $75,000 annually are particularly wary of their budgets this year, with more than half (56%) saying they'll struggle to afford holiday gifts. In fact, more than a third (35%) say they plan to spend less money on this year's gifts than they did in 2022. Price will be the most common deciding factor in their purchases (57%), well beyond brand name, product quality or immediate availability.
It's not that consumers have been avoiding steps to prepare for holiday demands. More than half of respondents surveyed (54%) shared that they save throughout the year to minimize the financial impact of holiday shopping. Yet, despite all best efforts:
- 40% say that holiday spending will put them in debt.
- 60% expect to carry holiday debt beyond two to three months.
- 20% believe this debt will take more than six months to pay off.
Whether they're just trying to save some budget for the new year, or they're dealing with an unexpected financial emergency — 40% said such an issue will alter the way they spend this holiday season — consumers will think twice before clicking "add to cart" this year. Here are a few steps they're taking to keep budgets in check:
Rise of the price sleuths
This year, many shoppers will resist the temptation to buy multiple gifts from a single store out of convenience. Instead, they're willing to be patient, monitoring for the best possible deal. Fifty-seven percent of consumers say they'll check at least three stores to find the lowest price before buying, and 28% are willing to check up to 10 stores — or even more.
The skyrocketing success of Cyber Monday, including the promotional days surrounding it, has made it easier than ever for bargain hunters to uncover the best deal. Nearly a third of shoppers believe they'll find better offers on Cyber Monday than Black Friday. Similarly, 32% prefer Cyber Monday brings the good deals to their doorsteps, rather than forcing them to fight Black Friday crowds in person. And of those who still plan to participate in Black Friday sales, 40% will shop strictly online.
Shopping beyond November promotions
A large majority of consumers (92%) said their holiday shopping will take place well into December. While promotional windows surrounding Black Friday and Cyber Monday continue to absorb the bulk of consumer interest and media attention, a substantial number of respondents said that "some" (41%), "most" (37%) or "all" (14%) of their holiday shopping would be fulfilled after Thanksgiving.
This indicates that shoppers will remain on the hunt for holiday bargains and promotions to meet their gift-giving demands long after these now-traditional tentpole sales events. Even those who've already experienced unexpected financial emergencies will continue to pursue holiday giving, but with understandable adjustments. 53% will plan to make fewer purchases, 48% will seek out less expensive gifts, 27% will limit the amount of people to purchase for, and 24% will explore gently used items from the second-hand marketplace.
Reducing the receipt
Consumers who said they planned to alter their spending because of an emergency saw buying fewer large gifts as a potential solution, with 48% taking that route. That mindset was prevalent across our survey pool. Sixty-eight percent said their largest individual purchase won't run more than $100 — and almost a third (30%) said it won't run over $50. Only 8% plan to buy a big-ticket item over $250.
While 44% said they'll put their largest purchase on a credit card, alternatives to layaway such as buy now, pay later offered at checkout don't seem to have secured a foothold. Just 5% of shoppers plan to use one of these services this holiday season, and 42% say they'll have all their holiday spending paid off within a month after Christmas.
Merry for less money
Although many shoppers plan to cut their budgets this year, that doesn't mean the holidays will be any less bright. Online deals — whether that be comparing prices throughout the season, taking advantage of Black Friday/Cyber Monday events or searching for hidden gems on secondhand marketplaces — can provide an opportunity for consumers to find the perfect gift for less cash.