JLL: Holiday budgets to increase, driven by entertainment, dining out
Holiday spending is expected to increase this year, but gifts aren’t the main driver, according to a new report.
JLL's Holiday Shopping Survey found that Americans plan to spend $1,243 on the holidays this season, up 9.7% from last year and nearly back to where budgets stood two years ago. The company noted that consumers are prepared to spend after scaling back last year, when planned holiday spending was $1,133 per household.
Gift budgets moved very little this year, according to JLL, rising 3.1% compared to last year. The majority of holiday budget increase is expected to go towards food and decorations, up 16.0%, and to entertainment and dining out, up 17.3%. Gifts now account for just under half of the season's budget, at 48.1%, which is slightly less than last year. Shopping for fewer people is the one cost-cutting tactic that grew, up to 28.9% from 24.9%.
[READ MORE: ICSC: 93% of shoppers to visit a store for holiday shopping]
Mass merchandisers remain the most popular holiday shopping destination, with more than half (54.6%) of respondents planning to make a trip, although this is a drop from 62.2% last year. Department stores moved to the second most-common destination, at 53.4%.
Jewelry was the biggest gainer from last year, rising to 25.3%. Electronics retailers lost the most ground, falling to 32.2% from 39%, consistent with fewer shoppers buying tech as gifts for others, JLL said.
The survey noted that the average shopper plans about five stops when visiting a retail center for holiday shopping. Those planning one or two stores expect to spend $863, while those planning six to nine expect $1,550, and the 10-or-more group $1,656. JLL says the last group also stays longest, averaging about 74 minutes, which suggests the time is a “byproduct of the itinerary” rather than the cause of the spending.
Despite rising budgets, consumers are still on the hunt for holiday value. More than eight-in-10 shoppers plan to take advantage of Black Friday/Cyber Monday sales across both channels. Black Friday remains the anchor of holiday shopping, but slipped on both channels, to 39.8% in-store and 55.1% online. Cyber Monday fell hardest online, down to 46.9% from 55.2%.
Just a quarter (26%) of consumers plan to begin holiday shopping before October, and only 42.4% by Halloween. The busiest starting points now sit between Halloween and Black Friday weekend, at 19.6% each.
JLL’s full report can be found here.
