Donna Hilliard, executive director of CodeTenderloin, said nonprofits serving homeless people are currently seeing more demand than ever before.
Source: Code Tenderloin
Code Tenderloin, a non-profit organization servicing homeless people in San Francisco, said he has a gift card worth about $ 7,000 to distribute to those in need of additional financial support during the holidays. ..
Over the last few weeks, community members have been requesting food, clothing and gifts. Others simply seek the help of Code Tenderloin to put the roof on their heads on rainy nights. Donahiriad, executive director of Code Tenderloin, said these solicitations are likely to increase as the holiday season prolongs.
“Everyone is very excited and spends their days this holiday season, but there is a whole community of people who are stressed,” Hilliard said in a telephone interview. “This year we are seeing more demand than ever before.”
The dynamics witnessing Code Tenderloin unfolding in San Francisco show a larger wealth gap that accelerates only during the Covid-19 pandemic and is especially noticeable during the holiday season. Holiday sales forecasts are rosy, with the industry’s largest trade association, the National Retail Federation, seeking historic profits of 8.5% to 10.5% year-over-year. However, growth is driven primarily by the wealthy part of consumers. On the other hand, according to one survey, we do not expect the highest number of people to participate in gifts.
“The fork goes crazy”
Rising prices for fuels, groceries and other commodities weigh heavily on the hearts of many shoppers. According to the University of Michigan Consumer Emotions Index, consumer confidence reached its lowest level in 10 years in November as inflation rose to its highest level since the early 1990s. Shoppers are spending money, but they are becoming more and more nervous about opening their wallets.
“People who were already struggling before the pandemic rights are now really struggling,” said Hilliard. “And all the inspiration is coming now. People are surprised because the rent moratorium is gone.”
According to a Deloitte study, 11.5% of people will end the holiday season by spending nothing on gifts, gift cards and other entertainment items. As far as the consulting firm is tracking, this is a record amount of Americans on the sidelines.
Deloitte found that high-income households spend five times as much as low-income households during the holiday season. The consulting firm surveyed 4,315 consumers about their holiday shopping plans from September 7th to September 14th.
Stephen Rogers, Executive Director of Deloitte’s Consumer Industry Division, said: “For low incomes, it starts with the health crisis turning into a financial crisis. [bracket].. “
“Our people investing in 401ks worked very well,” he said. “From 2019 to 2021, we can see that the low-income group spends nearly half of what it used to be. The high-income group spends almost twice as much as it did two years ago.”
According to a Deloitte study, households that bring in more than $ 100,000 a year will pay $ 2,624 per person on this holiday, an increase of 15% from 2020. Low-income earners under $ 50,000 a year plan to spend $ 536 per household, down 22% from last year’s levels.
Big spenders obscure people who aren’t spending
Karthik Easwar, an associate professor at Georgetown University’s McDonough Business School, which specializes in consumer psychology, agreed that the economic impact of pandemics would be significantly uneven.
For some Americans, it meant unemployment, long layoffs, or additional health risks because they worked at the forefront in an hourly retail position. For Americans doing white-collar jobs, that simply meant a change of location from a company office to a home office. Meanwhile, these workers sucked up savings from canceled vacations, summer camps and other activities as the value of the shares in their severance pay account increased.
“We all experienced a pandemic, but some experiences were very different depending on different parts of our society, especially our workforce,” Eswer said. “Still, the effect can be seen.”
However, some key economic indicators show a recovery. The unemployment rate is falling. There are more jobs than people trying to fill them. And a tight labor market means that many employers are raising wages and undermining their perks. For example, Macy’s has invested $ 35 million over the next four years to provide workers with an education program that covers 100% of tuition, books and fees.
But during the holiday season, there is still an economic gap between those who can afford to spend luxury and those who feel they have little room to spend, Eswar said. Some retailers handle large expenditures. Their spending on rising sticker prices is likely to mask the decline among financially deprived consumers, he said.
“There are consumers who want to spend a lot of money. If you spend $ 5,000 on a trip to Disney, spend thousands of dollars on luxury and expensive gifts for your family, or buy a new car, It’s a lot of people who aren’t spending $ 700, which they might normally spend, “Easwer said.
One item in this year’s Neiman Marcus holiday catalog is a champagne vending machine that sells for $ 38,000. The company said it has already sold some.
Source: Neiman Marcus
Known for its wealthy shoppers, Neiman Marcus publishes an annual holiday catalog featuring the best “fantasy” gifts. This year’s copy contains a 30.86 carat diamond called the Mugal Heart. That’s a whopping $ 6.1 million. Among the items listed is the Moet & Chandon Champagne Vending Machine, which sells for $ 38,000. Some department stores have already sold.
Rana Todlovich, president and chief merchandising officer of Neiman Marcus, said the company saw customers getting a good start on this year’s holiday shopping and spending more money on a single transaction. ..
“We see a lot of more robust activity earlier than the previous year, which really speaks to their expectations and excitement,” she said. “We also sell an unusual amount of gowns and dresses, and the sales of black ties are very high.”
Some retailers are trying to keep prices low
But on the other side of the pricing pendulum, discount stores and discount stores are trying to keep the cost of shoppers buying within budget low.
Last week, Wal-Mart CEO Doug McMillon and Target CEO Brian Cornell said consumers are looking for value, especially as inflation pushes up prices for pantry staples and household items, to keep prices low. I promised.
“That’s our goal,” Wal-Mart CEO Doug McMillon said in an interview with CNBC’s “Squaw on the Street.” “We save people money and help them lead a better life. They are the words that came out of [Walmart founder] Sam Walton’s mouth. He liked to fight inflation. We do so too. “
Inflation is widespread — even the dollar store had to take an increase. Dollar Tree has raised the minimum fare to $ 1.25 to offset the pressure of rising fares. However, we still believe that slightly higher prices are competitive.
“At $ 1.25, we believe it will be an undeniable value for what. [shoppers are] Dollar Tree CEO Michael Whitinsky said in this week’s earnings announcement.
According to another Deloitte survey, 54% of 70% of people who started holiday shopping by late October said they were finding higher prices than last year. About one-third of consumers also say they have increased their holiday budget from what they had planned for September. Deloitte surveyed 1,200 consumers between October 21st and October 25th.
But not everyone has the same flexibility in deciding to spend more money.
Rod Sides, Deloitte’s Vice Chairman of Retail Distribution, said: “There is this uncertainty when gas prices, food prices, and the usual ones of those kinds continue to rise at the pace we see. Cover my rent, and maybe I’m before. did not.”
Aside from price sensitivity, some consumers may be on vacation because of pandemic anxieties, according to Easwar. They have lost their loved ones because of the coronavirus or are still nervous about catching them.
“Should I go to the store or order online? Should I go to a big holiday party or not?” … because we all struggle with that balance , It will have a big impact on consumer behavior this year. “
Code Tenderloin said he was busy trying to secure enough turkey to cook for this week’s Thanksgiving meal before shifting his focus to gift gifting and gift card distribution.
Del Seymour, Executive Director of Code Tenderloin, said: “And this is a very wealthy city.”
More Americans Will Not Buy Holiday Gifts This Year
Source link More Americans Will Not Buy Holiday Gifts This Year