With Amazon Prime Day kicking off an early start to the holiday shopping season tomorrow, there’s a lingering question of how much consumers will really spend this quarter, considering how sharply spending declined at the beginning of the pandemic.
But new research suggests that consumers are indeed ready to begin spending again in Q4. More than half (58%) of US adults surveyed said they expected to spend the same amount or more this holiday season than in prior holiday seasons, according to a July study by OpenX and The Harris Poll. That still leaves 42% of consumers planning to cut back on holiday spending—but those who will spend should push total holiday retail sales into positive territory this year, per Deloitte, which predicts a year-over-year increase of 1% to 1.5%.
In addition to holiday shopping, the relaxing of restrictions and a general optimism about the economy will lead to increased consumer spending in Q4 and beyond. Lockdown measures led consumers to cancel vacations, stop visiting restaurants, and reduce in-person shopping, which in turn produced drastic declines in consumer spending in March and April.
But with that drop in consumer spending came an increase in savings. About 28% of respondents to the OpenX and The Harris Poll survey said they saved money during the pandemic. And many of those who saved are ready to spend again—more than half of those respondents said they expected to increase their discretionary spending in Q4 or next year.
Consumers overall appear optimistic about 2021, with 36% of respondents reporting plans to spend more in 2021 than they did in 2020. These general attitudes have persisted since the study was conducted in July: US consumer confidence surged in September to the highest it’s been since April, per The Conference Board’s Consumer Confidence Index as cited by U.S. News & World Report.