Planned holiday spending up from a year ago; improved financial situation behind uptick
Inflation continued to slow throughout 2024, with wage growth outpacing price growth, giving consumers more purchasing power. As a result, two-thirds of Virginians plan to spend at least as much as last year. Moving into the heart of the 2024 holiday spending season, this is good news for businesses across the commonwealth.
Nationally, inflation is 2.6%, down considerably since last year. Annual wage growth averaged 3.9% in the third quarter. When wages grow faster than overall prices, consumers have greater purchasing power in the marketplace. High prices require greater expenditures to buy the same goods; only 31% of Virginians report that their increased spending this holiday season is due to inflation, down from 43% last year. More than 20% attribute increased spending to their personal finances and employment situation. With an improved financial situation from reduced inflation and strong employment, Virginians plan to buy more this holiday season than last. This is great news for businesses seeking holiday revenues to reach 2024 sales targets.
The average anticipated holiday expenditure is up almost $200 from last year, at $1086. Most of that spending is expected to be on traditional gifts ($508), followed by experiences ($312) such as entertainment at home and socializing away from home, and non-gift purchases such as holiday decorations ($265).
The distribution of holiday spending has changed modestly since last year. The increase in planned spending is primarily due to a shift from planned expenditures between $100 and $500 (down to 44.7% in 2024 from 48.4% in 2023) to between $500 and $1,000 (up to 20.6% in 2024 from 17.7% in 2023).
More than one-quarter of households say they plan to start shopping earlier this year than a year ago, while more than half plan to start around the same time as last year. These values are like patterns reported in 2023. In 2022, more than a third started shopping earlier than the previous year. This indicates that over the last few years, consumers have spread their spending over a more extended period in the face of higher prices. However, changes are tapering off as price growth relative to wage growth eases financial burdens. This year, respondents plan to do about 51% of their shopping online, down significantly from 2023 (58%).
The 2024 Holiday Spending Report is conducted by the Institute for Policy and Opinion Research at Roanoke College as a public service.
Analysis
"Planned holiday spending has accelerated from a year ago,” said Dr. Alice Louise Kassens, John S. Shannon Professor of Economics and Senior Analyst at the Roanoke College Institute for Policy and Opinion Research. The average Virginian plans to spend about $1,100 between gifts for others, experiences, and other non-gift purchases, up by over $100 from 2023. The accelerated spending is not primarily due to higher prices. Instead, purchases are increasing due to improved financial positions for Virginians. Wages are growing faster than overall prices, putting power in consumers' wallets. People are feeling better about the economy, and consumer sentiment is rising. This is good news for businesses looking to top off their annual revenues this holiday season. An online shopping platform will be advantageous, as Virginians plan to do about half of their shopping online.”
Methodology
Interviewing for the Roanoke College Poll was conducted by The Institute for Policy and Opinion Research (IPOR) at Roanoke College in Salem, Virginia, between Nov. 11 and Nov. 16, 2024. A total of 716 completed interviews came from random telephone calls and texts to 452 Virginians, and 264 responses were drawn from a proprietary online panel of Virginians. Interviews were conducted in English. Cellphones constituted 76% of the completed phone and text-to-web interviews.
The phone sampling frame was provided by Marketing Systems Group, with the landline sample generated by random digit phone numbers with area and exchange code coverage in proportion to the population density in Virginia; the cellular sampling frame was randomly divided so that half of the potential respondents would receive a text message with an invitation to complete the survey on their own before we would call them. The other half would be called and interviewed over the phone by a live agent, who would send a text message afterward with an invitation if the respondent was unavailable when we called. Cint USA, Inc. facilitated the online panel with completion time and attention check questions used for quality control. IPOR regularly uses bootstrap analysis of post-survey results to control for quality within the blended frames.
A copy of the questions and all toplines may be found here.
More information about the Roanoke College Poll may be obtained by contacting Dr. Alice Kassens at kassens@roanoke.edu or 540-375-2428 or the Roanoke College Public Relations Office at 540-375-2282 or rcnews@roanoke.edu. roanoke.edu/IPOR