Across the globe, retailers and consumers are preparing for less spending this holiday season. Deloitte’s annual holiday reports for Australia, the USA and the UK have highlighted a drop in spending due to global inflation and cost of living pressures.
In Australia, 55 percent of retailers believe December will be the busiest and most crucial month for overall performance. Rising inflation challenges the confidence in the year-on-year sales growth; only 67 percent of retailers expect an increase compared to 80 percent in 2021. Online sales are expected to slow down for the first time since 2018 as consumers seek human interaction, and Millenials and Gen Z wield the largest share of purchasing decisions. Cost pressures and macroeconomic factors are retailers' most significant concerns for the period.
In the USA, 37 percent of households said their financial situation was worse than last year. The shopping period for the holiday season is expected to shrink from 6.4 weeks to 5.8 weeks, and 23 percent of holiday budgets will be spent by the end of October. Online retailers and mass merchants will be the preferred shopping destination, with online shopping taking a 63 percent share. However, in-store shopping looks to grow from 28 percent in 2020 to 35 percent.
In the UK, six in ten shoppers believe they will have less money to spend on the Christmas period. Around 38 percent of consumers said they would switch to cheaper stores or brands for gifts, and 35 percent would do part of their Christmas dinner shop at a discount supermarket. Instead of shopping in December, 54 percent of consumers said they would complete their shopping in November.
