The holiday shopping season has been anything but normal the past couple of years because of COVID-19 and supply-chain disruptions. This year, a new forecast says Denver-area shoppers will likely spend less and buy fewer gifts as inflation stays high and fears of an economic downturn loom.
A survey released Friday by Deloitte found that Denver-area shoppers plan to spend on average $1,624. That’s higher than the national average of $1,455, but 12% lower than the average amount spent in 2021.
Nationally, the level of holiday spending is expected to remain flat compared to last year.
Of the Denver-area residents surveyed, 40% said their financial situation is worse than in 2021, said Steve Rogers, managing director of Deloitte’s Consumer Industry Center. Roughly 42% of the respondents said they expect the economy to weaken in 2023.
“The last couple of years it’s been COVID, it’s been about the supply chain,” Rogers said. “This Christmas, it’s more about inflation and people not feeling as financially secure.”
Retailers will have to account for their higher costs without scaring away consumers, Rogers said.
People surveyed in Denver plan to buy fewer gifts this year, cutting the number from an average of 17 in 2021 to 10 this holiday season. Rogers said people will find a way to navigate the economic challenges, but shopping lists will likely be a little lighter and a little shorter.
The survey of 442 Denver-area residents Sept. 6-21 found that about 62% of the spending is expected to be online. In-store shopping is expected to increase from 32% in 2020 to 37% this year.
Shoppers also plan to hit the stores and keyboards earlier. Denver-area respondents are expected to get in about 20% of their holiday shopping by the end of October.
“Six in 10 retailers say they plan to pull promotions forward by a week or two” to accommodate people, Rogers said.
One thing retailers aren’t sweating too much is having the items people want. The pandemic caused disruptions in the supply chain as factories shut down, leading to shipping delays and bottlenecks in ports.
“We’ve kind of been trained as consumers to expect that things won’t necessarily be on the shelf, the items we wish to be on the shelf,” Rogers said.
But retailers told Deloitte that they expect to have the products people want at the time they want them, he added.
However, businesses are still dealing with one pandemic-related issue: worker shortages. Charlotte Elich, who owns the 5 Green Boxes gift shop and another store on South Pearl Street in Denver, said she is still scrambling to fill shifts. She also has a shop in Denver’s Union Station.
“I’m on the counter more than ever,” Elich said. “I’ve cut hours at Union Station. I don’t have the staff.”
Inflation is an additional stress for Elich and other business owners.
“Everything has gone up, absolutely everything. Freight is incredibly expensive,” Elich said. “This whole year, it feels like there isn’t a huge change in sales, but there’s less money in the end. I feel it’s more of a struggle now than probably in my whole career.”
The upside, Elich said, is she’s still in business after opening her first store on South Pearl Street 45 years ago. And she stayed open through the pandemic. Her sales in December 2021 were close to 2019 levels.
“We’re always optimistic, and we love December,” Elich said.
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