Tis the season to celebrate – and splurge

Consumers budget big on holiday cheer

It’s the most wonderful time of the year, arguably. The delicious nip in the air, the smell of fall spices, the taste of eggnog and mulled cider – in short, the advent of holiday season, holiday gatherings and – yes – holiday shopping. The results are in and present a merrier picture than 2023. According to our Holiday Shopping report, Americans plan to spend big this holiday season. On average, holiday budgets are 31.7% higher than in 2023, totaling $1,261 for gifts, holiday food & décor, and experiences. Over the past couple of years, we have also seen shoppers focus less on giving and more on living.

Gift spending now makes up 46% of total holiday budgets compared to 55% in 2023. While gift budgets rose a moderate 9.9% from last year, planned spending on food & décor jumped 61% from 2023 (and 32.5% from 2022) while holiday entertainment and experience budgets surged 56.4% year over year.

The leap in holiday budgets may be a reflection of improving consumer sentiments and a slowing of the pace of inflation growth. While still concerned about prices, consumers responded that they were less likely to adjust how they shop for the holidays because of inflation.

The gradual de-emphasis on gift-giving corresponds with two factors: the increasing focus on experience, and the climbing rate of self-gifting we’ve observed over the last few years. Regardless of reasons, consumers plan to have a very merry holiday this year.

Shoppers embrace feasting and fun

I remember taking my daughter to see The Nutcracker for the first time: the delight, the wonder, the bubbling questions. There’s something very special about ushering children into new or even, time-honored experiences and the holidays present rich opportunities for that. There’s plenty for adults to do as well, and Americans plan to immerse themselves in the joys of the season. More than 95% of respondents surveyed plan to participate in at least one holiday-related experience. And they’re doing so even more than they did in 2023.

Consumers are not limiting themselves to one entertainment activity. Over 76% of shoppers plan to participate in two or more holiday experiences. This is especially true of wealthy consumers – 86.9% of whom will enjoy multiple holiday-related experiences.

With smaller budgets, modest-income shoppers (earning less than $50,000) were significantly less likely to participate in holiday experiences. Nearly 38% will stick to one experience.

Almost three-quarters of respondents plan to dine out, while more than half will go to the movies. With a roster of strong movies slated for release in November and December, I anticipate that many consumers will make their way to theaters. Gladiator II and Wicked will both be released around Thanksgiving, while kids’ movie highlights include Moana 2, Sonic the Hedgehog 3, and Mufasa: The Lion King.

Considerably more consumers than last year will also attend a live performance, visit a kids’ attraction and go to an eatertainment venue. More than half of the primarily Millennial group (age 30-44) will visit a kids’ attraction, compared to only 36.3% of all respondents.

Stores increase in relevance for the holidays

Most consumers will interact with the physical retail store even more than last year, either by shopping in a mall; in an open-air center; picking up curbside or in-store, or a combination thereof. In fact, only 12.8% of holiday shoppers will exclusively order online for home delivery.

Most shoppers (71%) will use multiple channels to shop. Malls will take center stage among bricks-and-mortar retail this year, jumping in popularity by 18.7 percentage points. Additionally, department stores nabbed the top spot among retail categories for holiday shoppers.