(Bloomberg) -- American shoppers—distracted and fearful as 2020 enters the final quarter—could still throw analysts expecting a record holiday a curveball in the kind of rip-the-rug-out revelation that’s become this year’s signature play.
Despite early projections of a knockout holiday, the busiest shopping time of the year may be marred by Americans too concerned to spend freely as an unprecedented election season and the continued pandemic land a one-two punch.
“This year we have these two forces in our way, interfering with our holiday,” said John Gerzema, chief executive officer of Harris Poll. Throw in the virus-related recession, and “you have this once-in-a-lifetime confluence of three events: the pandemic, the economic effect and the instability of the election that’s now just casting a pall over people’s holiday planning.”
According to a survey of more than 2,000 U.S. adults conducted by Harris Poll in partnership with Bloomberg News, nearly seven in 10 U.S. adults say the upcoming presidential election, now less than a month away, is making them feel uncertain about the economy. Among these consumers, 50% say it’s causing them to be more conservative in their holiday spending this year.
The poll, conducted Sept. 29 through Oct. 1, largely took place before the news of President Donald Trump’s positive Covid-19 diagnosis. The constant barrage of news updates in the run-up to the election on Nov. 3 is distracting Americans from their holiday planning, especially for the youngest consumers.
Election aside, the continued spread of the coronavirus isn’t inspiring much confidence this holiday season either. Only a third of Americans are optimistic that they will find a way to celebrate safely, and half say they won’t go to any in-person celebrations, like Thanksgiving dinner. And most consumers say they have less money to spend due to the pandemic, which threw millions of Americans out of work and forced them to prioritize essential items like groceries and cleaning supplies over discretionary goods like clothing and jewelry.
The survey’s grim results foreshadow a difficult fourth quarter for a battered U.S. retail sector badly in need of a win after losing billions from months-long shutdowns and changed consumer habits. In a normal year, department stores and apparel sellers get about a quarter of their annual sales in November and December, according to Fitch Ratings Inc. But shoppers are hesitant to spend heavily or move forward with their time-honored holiday traditions until they get more clarity on the election and the virus outbreak, creating even greater problems for retailers already ceding ground to giants like Amazon.com Inc (NASDAQ:AMZN). and Walmart (NYSE:WMT) Inc.
Young consumers, who retail executives have been trying to make loyal customers as they come into real spending power for the first time, might be the ones most likely to sit out this season. In September, the U.S. unemployment rate was 7.9%—more than double than it was this time last year—but 13.5% for those between 16 to 24, according to data from the Labor Department released Friday. Still, younger Americans are about three times more likely than the oldest Americans to feel that giving gifts this season is important, further pressuring their finances.
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“Young people have been disproportionately affected the most from the downturns of Covid, so we see that,” Gerzema said. “That’s got an implication for retailers. How do you think about affordable gifts that are accessible and can allow young people to feel a connection with their family and friends?”
Those consumers that have the ability to spend increasingly want to do it from home, marking a dramatic acceleration of a shift toward digital that has troubled the retail sector for years. Nearly half of consumers said they plan on doing their holiday shopping entirely or mostly online. That’s up from 28% of consumers who said the same in 2019. Just 8% of shoppers plan to do their shopping entirely in person, down from 14% a year ago.
It’s not just ease that has shoppers clicking for gifts instead of venturing out to shop inside a store; it’s also fear. Social distance doesn’t necessarily feel synonymous with the rush of Christmas shopping.
More than three-fourths of consumers think retailers should encourage consumers to shop online to deter crowds on Black Friday, and just over half of Americans aren’t planning to shop at malls or department stores this year. About one in five U.S. shoppers took photos with Santa in 2019 but won’t this year, the survey shows.
“In-person shopping is really going to be a concern as we approach the holidays,” Gerzema said, citing data in the survey that showed women are even more risk averse to going into stores, with 82% of female shoppers concerned holiday shopping crowds may spread Covid-19 compared with 75% of men.
“That’s really a cautionary tale. It doesn’t mean they're going to shop less necessarily,” he said, “but it means that they may do a lot more online.”
©2020 Bloomberg L.P.
