Survey results released Thursday from the financial advisory company Deloitte showed holiday consumer spending could drop 17% compared to last year in the Los Angeles Metro area due to the COVID-19 pandemic.
Deloitte’s survey showed people are likely to spend an average of $1,256 on the holidays this year compared to a 2019 survey when the response average was $1,511 in the Los Angeles metro area.
“In this season of uncertainty, price, value and convenience continue to be top considerations for consumers, as is the desire to get creative with how they celebrate the season with family, friends and pets, no matter the circumstances,” said Rod Sides, the vice chairman of Deloitte’s U.S. retail and wholesale distribution.
Surveyed Los Angeles shoppers said they will be more frugal than the national average this year, as the response from households across the U.S. was that they are willing to spend an average of $1,387 for the holidays, Deloitte stated.
Sides said that as travel spending declines, with Los Angeles shoppers planing to spend 41% less on trips than last year, retailers will likely benefit and should receive a higher percentage of total holiday revenue.
“The key for retailers is to stay flexible and offer options that appeal to consumers’ changing behaviors and address their evolving needs,” Sides said. “Those that do will likely be better positioned for a bright holiday season.”
Despite the downward holiday spending trend, according to the survey, 53% of Los Angeles shoppers said they intend to spend more or the same as last year — but that’s down from 78% in Deloitte’s 2019 survey — meaning 47% of responders said they plan to spend less than last year.
Deloitte stated 38% of consumers nationally expect to spend less this holiday season compared to last year, which is driven by concerns around the economy and deteriorations in household income and financial situations.
Of the total shoppers surveyed in the Los Angeles metro region, 55% said they agree or strongly agree that they are anxious about shopping over the holidays, while 23% said they strongly disagree or disagree.
The results from part of the survey showed:
— 51% of people plan to return to pre-COVID-19 holiday shopping based on the implementation of safety precautions and availability of vaccines or proven treatments for the virus;
— 42% said COVID-19 precautions are critical for selecting their retailer; and
— 42% said they prefer specific retailers due to their COVID-19 precaution conduct over the last six months.
Most shoppers said they are concerned about the economy in general and cited economic stability as their reason for spending less, and more than a third said they were concerned about losing their job or having their income reduced as well as the rest of their household’s financial situation.
Although shoppers have showed anxiety, Deloitte stated, about half of the shoppers surveyed said they think he economy will improve in 2021, although 31% said they think it will weaken. Additionally, 76% of Los Angeles shoppers said they plan to donate during the upcoming holiday season.
Surveyed Los Angeles shoppers say they’ll spend 65% of their holiday budget online, an increase from last year’s survey of 59%, and 28% percent said they plan to shop at stores.
According to its website, Deloitte is a global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services, with 175 years of experience in the industry.