With ‘Revenge’ Buying, Shoppers To Boost Holiday Spending 25%, JLL Survey Finds Article originally posted on CoStar on October 7, 2021 Real Estate Firm Expects Activity To Start Earlier, Include Brick-and-Mortar Sites Shoppers will be making up for the spending they missed out on during the pandemic by jacking up their holiday-gift budgets about 25%, according to an estimate by real estate firm JLL that holds promise for retail property owners. “Revenge shopping, the phenomenon where consumers make up for lost time with increased spending, is expected to buoy holiday foot traffic at retailers this season,” JLL said Thursday in releasing the results of its annual holiday survey. Consumers plan to spend 25.4% more this year, an average of $870 per person on all holiday-related purchases, compared to an average of $694 in 2020, according to JLL. That means this year’s spending will be nearing 2019’s pre-pandemic average budget of $874. There is also pent-up demand for in-person shopping and experiences following the hiatus, and shelter-in-home mandates, sparked by the pandemic last year, JLL said. While the survey is bullish about the holidays, the firm also cautioned that supply-chain problems may disrupt the retail industry in the form of inventory shortages and shipping delays. In a possible preview of those issues, last week home-goods retailer Bed Bath & Beyond reported supply-chain woes crimped its sales, and that foot traffic slowed in August and September, possibly because of customer fears about the coronavirus delta variant. Perhaps because of concerns about the availability of merchandise, more consumers are starting their holiday shopping earlier, before Thanksgiving, JLL said. Brick-and-Mortar Shopping Retail real estate trade group ICSC is slated to release its holiday spending forecast next week, while the National Retail Federation will announce its outlook Oct. 27. Other forecasts are joining JLL in anticipating a strong sales period. “This should be a strong holiday season as consumers are excited for it and plan to treat themselves and others after last year’s rather subdued celebrations,” Neil Saunders, managing director at GlobalData Retail, told CoStar News in an email. “Most consumers are also in a good place financially and have money to spend from savings and from the curtailment of other activities like travel. On top of this, inflation will push up prices and bolster growth, although this will not necessarily be welcomed by consumers or be all that helpful to retailers facing higher costs.” Rachel Johnson, associate director of market analytics for CoStar Group, concurred. “Overall spending will likely increase this holiday season,” she said in an email. “Consumers are spending through the recovery — total U.S. consumer spending as of end of September was 20% higher than January 2020. I do believe government assistance in the form of stimulus checks and additional unemployment assistance has bolstered consumer spending, and the winding down of these programs may dampen total spending.” But Saunders had the same caveat as JLL. “The worry for retailers isn’t demand,” he said. “The worry is whether they will have enough to supply to fulfill consumer needs. That, and the resurgence of the virus, are the potential downsides to what should be a great holiday season.” JLL forecasts that 58% of shoppers plan to shop in stores or some form of shopping involving a physical store: 34% will buy online, pick up in store, and 22.6% will take advantage of curbside pickup. “Consumers are eager to return to in-person shopping this holiday season — immersing themselves in the holiday spirit to dining after a long day of shopping,” Greg Maloney, president of JLL’s retail division, said in a statement. “It’s a full holiday experience that many shoppers look forward to. And, it’s refreshing to see that in-person dining and enclosed malls are at the top of consumers’ destination lists.” Americans To ‘Splash Out’ The top five retailers that consumers plan to shop are Amazon, Walmart, Target, Macy’s and Kohl’s, according to JLL’s survey. “Revenge shopping from the pandemic feels personal this year, too, with consumers ready to treat themselves this holiday season,” Naveen Jaggi, president of JLL’s retail advisory services, said in a statement. “JLL’s holiday survey results show more than 70% of shoppers plan to self-gift this year, with clothing and shoes taking the top categories as consumer wardrobes continue to evolve as workplaces reopen and vacations are booked.” That doesn’t surprise Saunders. “Many consumers feel they missed out on a proper holiday in 2020 so are planning to double down this year with extra big parties, gifting sprees and treats for themselves. … People are giving themselves permission to indulge and splash out,” he said. More than half of shoppers will seek deals on Black Friday and Cyber Monday, but for most, those days won’t be the start of their holiday shopping, according to JLL. More than 50% of shoppers will start shopping before Thanksgiving, compared to 43.2% last year, while another 36.3% will start two to four weeks before Christmas, the survey found. A small number of last-minute shoppers, roughly 4%, will wait until the week before Christmas. “To those last-minute holiday shoppers, proceed with caution,” advises Craig Meyer, JLL’s industrial president. “While consumer-shopping budgets may be returning to normal, the supply chain is still facing pandemic-related challenges that could cause inventory shortages and shipping delays. Consumers should expect to shop earlier in the season if they want to be guaranteed to receive their items by the holidays.” And even with increased holiday budgets, the top priority for shoppers this year is still saving money, according to JLL. Because affordable goods are top of mind for many, 90% of consumers will shop at a mass merchandiser, 73% will shop at an online retailer such as Amazon or eBay, and nearly 30% will shop at a department store, the survey found.