Holiday shopping expected to reach over $1 trillion as inflation surges
Holiday shopping is expected to increase to more than $1 trillion for 2022, according to a forecast by Insider Intelligence and eMarketer. (iStock)
High inflation and fears that a recession could be on its way won’t stop holiday shopping from being robust this year, according to a recent forecast by Insider Intelligence and eMarketer. In fact, inflation could even propel holiday sales.
Consumer spending is projected to grow 7% to nearly $1.3 trillion, the forecast said. However, it noted that much of this gain is due to inflation.
Cyber Monday and Black Friday online sales could reach nearly $12 billion and $10 billion, respectively, the report predicts. This would mark a 3.8% year-over-year increase in Cyber Monday sales and a 3.9% increase for Black Friday sales.
These shopping holidays are expected to be the largest for e-commerce sales, followed by Thanksgiving, Small Business Saturday and Cyber Sunday.
Although online shopping is ramping up, in-store sales will also "remain strong at 5.9%" and surpass $1 trillion for the first time, the study projects.
"Consumers are comfortable being in stores and have money to spend," Insider Intelligence and eMarketer said in its forecast. "So they’re out shopping in full force once again. The decline of brick-and-mortar retail has been greatly exaggerated."
Many Americans are still dealing with major debt, even as holiday shopping is expected to increase. Total household debt increased by $312 billion to reach $16.15 trillion in the second quarter of 2022, according to data by the Federal Reserve Bank of New York.
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Sales of necessities to outperform this holiday season
Although holiday shopping is set to increase this season, Americans will focus their budgets on paying for necessities as they wrestle with surging inflation and economic uncertainty.
"Everyday essentials will outperform as traditional holiday categories falter," Insider Intelligence and eMarketer said in its report. "We expect consumers to shift their budgets toward groceries and household essentials and steer away from discretionary categories."
Online sales of food and beverages are expected to grow by 22.9% from the previous year, while health and personal care sales are projected to increase by 21%, the report says. Apparel and accessories could see a 10.9% increase in sales.
Due to inflation, the costs of various essential goods have increased. The price of food at home rose by 13% year-over-year in September, according to the latest Consumer Price Index, a measure of inflation.
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Inflation has affected how people shop for sales
Even before the holiday shopping season began, inflation was affecting how people shopped during major shopping events.
Some consumers said inflation played into their shopping decisions during the 2022 Amazon Prime Day in mid-July, according to a study by Numerator.
In fact, 13% of shoppers said they didn’t buy something they were planning to buy, while 28% of shoppers passed on an item that was a great deal but not a necessity.
Moving into other shopping events like Black Friday and Cyber Monday, inflation will remain a concern for many holiday shoppers, the Insider Intelligence and eMarketer report said.
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