Consumers plan on buying fewer gifts and spending less this holiday season.
Average spending per person this holiday season is expected to decrease 18% to $515 from $627 last year, according to KPMG's 2020 holiday shopping report, "Season of Reckoning: 2020 COVID-19 Consumer Pulse/Holiday Report." Categories where respondents expect the greatest declines are clothing and accessories (down 27%), and electronics (down 16%) and gift cards (down 14%).
In addition, 41% of respondents said that they are not planning on going to Black Friday sales in person. The survey also found that the majority of consumers are shopping either in October (25%) or November (38%), although a fair number began as early as August (12%).
Online spending across all product categories is expected to increase this year over last. For example, there may be a 25% in online spending on clothing and accessories, a 19% increase on electronics and a 14% increase on computer and hardware, according to KPMG.
Holiday gift spend on family such as parents, children, and significant others, is expected to experience the smallest decline (2% to 5%), Holiday gift spend on friends, coworkers, and school children is expected to experience the largest decline (more than 20%).
"Faced with considerable uncertainty and reduced household income, consumers are spending less this holiday season, focusing on essential purchases for the home and gifts for close family members," said Scott Rankin, national advisory leader, consumer & retail, KPMG LLP. "In-store retailers hoping for a holiday reprieve may be disappointed. The migration to online continues across nearly all retail segments."
Other survey findings are below.
• Sixty-percent of consumers plan to give to the same number of people this holiday season, while 36% will give to fewer people
• Approximately one-third of consumers surveyed said their employment status was impacted by COVID-19.
• Thirty-six percent of consumers claimed a negative impact to income and an average reduction of 34%.
• Consumers have become more pessimistic about the length of time it will take for their spending to return to pre-COVID-19 levels.
• Nineteen percent of consumers have become more mindful of their own spending habits.
This survey was conducted in September 2020, and it polled 1,000 U.S.