People say the holidays come around too fast for all the preparations, but this year Chicagoans are saying their budgets might not be ready either.
Chicago shoppers said in a survey commissioned by the consulting and auditing firm Deloitte that they plan to spend an average $1,053 per household on the holiday this year, counting gifts, travel and entertainment. That result is down 32% from what Deloitte found in its 2019 survey of local consumers.
Blame it on the coronavirus and its damage to the economy. Asked the reason for spending less, about half of respondents cited economic instability or a decline in family income as the reason, Deloitte said. Others said they were simply saving more.
Overall, Chicagoans were portraying themselves as more frugal than the nation as a whole, which reported an average household spending plan of $1,387. That number was down 7% from a year ago, said Matt Adams, principal for Deloitte Consulting. Around a third of the national respondents cited the economy as a reason for cutting back.
Adams said a main reason for the spending decline is that people are curbing travel. “While we haven’t seen a similar decline in recent years, it’s reflective of a few factors: concern about the economy and personal financial situations and people staying closer to home,” he said in an email.
Deloitte has surveyed holiday spending expectations annually for 35 years.
The survey also shows that more shoppers plan to rely on the internet than on actual store visits, hastening a trend that pre-dates COVID-19. It found that half of the Chicago respondents were nervous about visiting stores, especially during crowded times, and that people expected to spend 66% of their holiday budget online.
Nervous consumers are the focus of retailers trying to plan for a shopping season like none before. Amazon, Best Buy and others already are rolling out online deals to get people to order early. The stores hope to avoid shipping delays in December and to cut down on in-person shopping that could spread the virus.
“Shoppers are going to be very selective in what they buy,” said Ken Perkins, president of Retail Metrics, a retail research firm. “Retailers, particularly department stores and specialty clothing chains, need to get it right in terms of inventory and customer traffic. They’re fighting for their lives.”
Despite the belt-tightening, Deloitte’s respondents said they plan to step up charitable giving for the holidays. It found that 77% surveyed in Chicago plan charitable contributions, typically as cash or donations of used items, for the holidays, a proportion that’s about a third higher than in 2019.
Nearly half of the Chicago shoppers said they expect the economy to improve next year, compared with 56% nationally.
The survey by an independent consulting firm was conducted in September and covered 417 people in Chicago and 4,012 nationally. It has a margin of error of plus or minus four percentage points.
Contributing: AP
