If you are not satisfied with what you get this holiday season, don’t blame Santa, blame grocery prices. More than a third of U.S. consumers said that rising food prices will cause them to either “most definitely” or “somewhat” cut back on their holiday spending, according to a Reuters survey of 1,000 consumers conducted by American Research Group.
Food prices were a key driver in a slight increase in the September Consumer Price Index, which edged up 0.3 percent. The food index was up 0.4 percent, compared with 0.5 percent in August, but the food at home index rose 0.6 percent for the third month in a row, while none of the major grocery store food group indexes declined.
Holiday spending forecasts have not exactly instilled holiday cheer. The National Retail Federation has forecast that November and December retail sales will increase 2.8 percent to $466 billion, but a recent Gallup poll forecasts that Americans will spend virtually the same on gifts this year ($712) as they did last year ($715). Unemployment, which stubbornly remains above 9 percent, could have a further negative impact on spending. This in turn, the Wall Street Journal recently reported, threatens to repeat a pattern that occurred in 2008 and 2009, in which weak sales caused retailers to cut staff and close stores.
Not a surprise, then, that just a third of Americans expect this will be more of a holly jolly season than last year, compared to 40 percent who were in the holiday spirit a year ago, says a new Consumer Reports poll.
Another holiday shopping survey from the consulting group Accenture, finds that nearly three-quarters of Americans (72 percent) expect their holiday spending to be “careful” or “controlled” this year. Of the shoppers who said they will be spending less this season, 43 percent said it is because they have less discretionary income, while 37 percent blame a rise in living expenses, and 30 percent less savings.
Other economic factors cited by respondents include those rising food bills (46 percent), gas prices (41 percent), concerns about the economy (39 percent), and home energy bills (38 percent). Seventeen percent fear losing their job or recently lost their job.
Of those who said they expect to spend more this year, 41 percent said they have more discretionary income, while another 41 percent said they will spend more because gifts will cost more. Just over a quarter (26 percent) said they want to treat themselves and their families after a tough year.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.