Financial Health
November 17, 2022

5 shopping tips to maximize holiday cheer

Given inflation and a looming recession, what can consumers do this holiday season? Four experts share their tips.

A cheerful man and woman bundled up in coats, scarfs, and gloves are standing in front of holiday lights. The man is holding gift bags and pointing at something offscreen.
Financial Health
November 17, 2022

5 shopping tips to maximize holiday cheer

Given inflation and a looming recession, what can consumers do this holiday season? Four experts share their tips.

This holiday shopping season is expected to be robust, a surprising forecast considering inflation and anticipation of a recession. The Wells Fargo report 2022 Holiday Sales: The Last Hurrah indicates we’ll see a 6% increase in holiday sales — a seemingly counterintuitive finding. “Income has not been keeping up with inflation, so real disposable income is growing way below trend,” said Tim Quinlan, Wells Fargo senior economist. “You’d think there would be a real retrenchment in consumer spending, but that just has not been the case. Consumers are continuing to spend, even when it’s at odds with their long-term financial health.”

Quinlan explained that consumers are dipping into savings and relying on credit cards to fund continued purchases. “Rather than curtail our spending, we’re tapping that excess saving we had built up during the pandemic.”

How long can this level of spending last?

“Purely arithmetically, it could last 15 months or so based on just how much spending is exceeding income right now,” Quinlan said, “but our bet is that for a lot of households, they’re already at that inflection point.”

Ike Boruchow, Wells Fargo senior retail softlines analyst, agreed that elevated spending could continue for a few months, but “the longer the economy remains weak, the longer inflation remains high, the longer the stock market remains volatile.”

Given inflation and a looming recession, what can consumers do this holiday season? Four experts share their tips.

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In a holiday-themed setting, three people laugh

Tips for holiday shopping

1. Shop early.
There’s been a lot of discounting ahead of what we would typically see, so that’s something consumers can take advantage of.

Time in transit is becoming less important because there is inventory on the shelf broadly. Whether you’re shopping online or in person, secure the merchandise early. Those huge hiccups that you saw last year probably wouldn’t happen again, but inventory and supply chains aren’t necessarily 100%. If you see something you want for the holidays, and it’s at the price you want, I would say buy it.

— Allison Poliniak-Cusic
Wells Fargo senior transport analyst

2. Look for deals in clothing and shoes.
Keep your eyes open for a lot more deals than you saw last year. Apparel and footwear are going to be pretty competitive this year because of over-inventory.

There’s no need to look at discount stores or closeout chains for the best deals because it’s not a full-price selling environment right now. I think you can look no further than the mall.

— Ike Boruchow
Wells Fargo senior retail softlines analyst

3. Expect deals on some big-ticket items.
Unlike last year, the consumer is entering the holidays in a position of strength. There will be deals that likely intensify throughout the holiday season.

Select dealers in various categories are dealing with excess inventory of bigger ticket items — furniture, TVs, appliances, tools, and grills. If you’re selective and you stick to the categories that are over-inventoried and promotional, that’s where the deals are going to be.

— Zachary Fadem
Wells Fargo senior retail hardlines analyst

4. Opt for experiences.
If you have older kids, taking your family out to a nice meal someplace in lieu of presents is a perfect way to celebrate the holiday.

— Tim Quinlan
Wells Fargo senior economist

5. Use credit cards wisely.
If you choose to use credit cards, opt for those that offer a 0% introductory rate and that offer rewards that are beneficial to you.

— Krista Phillips
Head of Branded Cards & Marketing, Wells Fargo Credit Cards

A close up of a person's hands. One hand is typing on a laptop and the other is holding a red credit card. There is a gift box on the table with the laptop and holiday lights in the background.