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Holiday spending expected to decrease during the pandemic, survey shows

By Katie Park, The Philadelphia Inquirer on

Published in Business News

Holiday spending is expected to decrease this year amid limited travel and incomes during the coronavirus pandemic, according to a survey released Wednesday from the accounting and consulting firm Deloitte.

The average household projected to spend $1,387, a 7% decrease year-over-year, according to the survey, which recorded answers from a little over 4,000 people in the U.S.

"Retail has changed so dramatically," said Peter Sachse, a longtime executive who was the former chief growth officer for Macy's.

"The competitive landscape has exploded," he said, adding that once-popular chain stores Kmart and Sears were no longer the retail powerhouses they once were.

Retail experts said they estimated that travel sales would come down significantly this holiday season as millions of people worried about the possibility of contracting or transmitting the coronavirus.

On average, the survey found, households could spend $260 on travel, a decrease of 34% year-over-year.

 

As a result, according to a podcast released earlier this month from Deloitte, gift spending could increase to make up for not being able to see friends or relatives. It would mark somewhat of a change compared to other years, which showed growing emphasis on experiences and services instead of material goods.

In keeping with consistent trends, online shopping will continue to boom — analysts said certain surveys had shown e-commerce had grown between 40% and 45% this year — and the popularity of in-person shopping could decrease.

The practice of buying online and picking up in-person is likely to remain popular, as will contactless pickup, analysts said. Adept retailers will offer contactless returns, as well.

Personal electronics, which rank among the top five most popular industries each holiday season, have a good chance of remaining a popular purchase this year, the analysts with. More people have stayed home during the pandemic and entertained themselves with computers, phones, gaming consoles, and TVs, and the holidays could present an opportunity to upgrade what they have. Increases in subscription services, such as HBO, Hulu, and Netflix, could also grow.

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