Heading into the gift-giving holidays, retailers anticipate improved spending levels despite inflation and higher interest rates. A survey by UPS-founded Ware2Go shows that 73 percent of merchants expect 2023 to exceed 2022 and 93 percent have planned for increases across the board.
“We’re hearing the interest rates are going up, things are going not as well, everything like that,” Ware2Go’s Kelton Kosik reportedly said. “Then you randomly get hit, whatever it was a week or two ago, with consumer spending being up and everyone just keeps spending. So, it’s very bizarre, and it’s made it a challenge and something that we really haven’t seen on a macro scale.”
If the metrics and poll hold true, that could be a boon for truckers and freight carriers. According to the Bureau of Labor Statistics, average consumer spending rose by 9 percent from 2021 to 2022. Food spending increased by 12.7 percent, which may have been driven by inflation. These rank among the top household spending categories that increased over that period.
- Alcoholic Beverages: 5.2 percent
- Apparel: 10.9 percent
- Dining Out: 20.1 percent
- Fees and Admissions: 27.4 percent
- Tobacco Products & Supplies: 8.8 percent
- Transportation: 12.2 percent
- Personal Care Products & Services: 12.3 percent
Supporting the findings of the Ware2Go study, the National Retail Federation (NRF) issued a statement claiming consumer spending would tick up by 3-4 percent during November and December, compared to last year. The NRF expects total sales upwards of $966.6 billion.
“The average household remains on relatively solid financial footing despite pressures from still-high inflation, stringent credit conditions and elevated interest rates,” NRF Chief Economist Jack Kleinhenz “Recent revisions to government data indicate that consumers haven’t drawn down as much of their pandemic savings as believed.”
There may be a few caveats that change the dynamic of household spending this season. More than half of Americans are reportedly expected to buy gifts through e-commerce platforms. While that does not necessarily change the number of truckloads CDL holders will pull this year, doorstep deliveries will likely surge. Supply chain analysts also expect fewer logistical issues, adding to consumer confidence that e-marketplaces such as Amazon can come through in time.
“What I was pleased to see was that 70 percent of the responders believe that there will be an increase or that they’ll surpass 2022 levels,” DHL Express U.S. CEO Greg Hewitt reportedly said. “I think it shows that e-commerce continues to grow.”