- Consumer spending patterns are set to change for the 2022 holiday season.
- Partying is still on … just a bit more economically than in the past.
- Value will rule, whether that includes eating out or cooking at home.
Folks are gearing up for winter 2022 to be cold and harsh. And I’m not just talking about the weather.
Inflation is at once-in-a-generation levels, despite Federal Reserve rate hikes. As fuel prices stay high and the job market slows, American consumers must work even harder to make ends meet.
“The most wonderful time of the year” is upon us. The holidays are traditionally a time when we expect big gatherings, fun parties, gift-giving and feasting. How can grocery retailers, alcohol sellers and restaurants win the holiday table in this economic landscape?
People will want to party … economically
Over half of respondents to Vericast’s June Awareness-to-Action Study said they plan to spend the same or more on the holidays this year.1
Yes, the party will go on. But people will be looking to stretch their dollars to the maximum, including even the most affluent consumers and well over one-third of consumers living paycheck to paycheck.
In the same survey, more than one-third of respondents said they will cut back on treats and splurge items, limiting their purchases to essentials. More than 60% said they will look to save as much as possible on their purchases.
But consumers still consider food and drinks for holiday parties essentials. Even so, they are focused on pinching pennies: About 30% said they will focus on buying provisions at stores offering the best deals and sales. More than 60% said they are more concerned about saving money on their holiday parties than making those events special.
Coupons will dictate what’s on the plate
How do they expect to be able to afford it all? They need a deal.
Coupons have always been a great way to get attention and almost everybody loves to save a buck. But in this environment, coupons are quickly turning into the must-have accessory of the season. When Vericast surveyed consumers in September 2022, 66% said coupons and discounts are more important than ever. And 63% of consumers are actively looking for coupons to offset higher prices.2
In lieu of a deal, consumers will look for the best price, of course. And increasingly that may be found at a restaurant. According to the Bureau of Labor Statistics, on average, grocery prices in October 2022 were up 12% compared with October 2021, while food away from home was up just 8.6% in the same period. While everything costs more, the economics of it all may make getting that holiday party catered a bit more attractive.
With nearly 60% of the respondents to the June Vericast survey saying they will spend the same or more on eating out this holiday season, it seems that consumers may see restaurants — either to dine out or to order in — as their best bet.
Of course, there’s serious competition for sales in the restaurant sector too. And “going out” often comes with the price of filling up your car or truck with gas. So, the choice of restaurants is greatly influenced by incentives and discounts, as will the final tally of the check at the end of the meal.
Value will trump everything
While the shelf or menu price matters, people are calculating carefully to choose the overall best value. All things being equal, they want to pay less, but they also need to get more.
That value equation has amplified the importance of private label grocery products. Vericast’s Director of Client Strategy — Grocery, Julie Companey, predicts that 2023 will be a pivotal year for private label brands, with better quality and branding converging with increased interest. And Vericast’s June survey indicates growing popularity: Thirty-one percent of respondents want to buy more private label brands for groceries to save money.
Similarly, the overall value provided will matter for restaurants. It won’t be enough to just rely on frequent diners to keep coming back. While nearly 60% of respondents to the June survey noted plans to eat out with the same or greater frequency this year, more than 40% are planning to eat out less. Restaurant operators need to show their value to new guests and entice these value-minded diners to come in for the first time or the first time in a while.
Consumers are decidedly in a value-seeking mindset. As a result, coupons, deals and sales will rule the holiday shopping season of 2022.
To learn more about how shoppers plan to spend this holiday season, download our holiday infographic.
1 Vericast Awareness-to-Action Study, June 2022 (n = 1,835)
2 Vericast Awareness-to-Action Study, September 2022 (n = 1,842)