SALT LAKE CITY — As holiday shoppers hit the stores to buy their last few presents, many are feeling the impact at the cash register.
Prices are up 22% compared to four years ago, according to Robert Spendlove, a senior economist with Zions Bank. And that kind of “shock to people’s finances is really hard to adjust to.”
Still, overall holiday shopping looks strong, with spending up 4.8% nationwide compared to this time last year.
“There's been this kind of really interesting disconnect from what we expected to see consumers do and what they’ve actually done,” Spendlove said in an interview with FOX 13 News. “We continue to see people out there spending even though they’re not happy about the higher prices.”
Shoppers at Valley Fair Mall in West Valley and City Creek Mall in Salt Lake City told FOX 13 News on Monday that they had cut down on holiday spending, focused more on price shopping and struggled to balance buying presents with paying essential bills.
Wilbert Jones, who traveled to Utah from Sacramento, California, said he’d also noticed the impact of inflation while holiday shopping.
“The prices are higher, a lot higher,” he said in an interview from the airport. “You can see that. You can notice that.”
In a recent Bankrate survey, one in three holiday shoppers said inflation would change their shopping this year – and one in four said they were stressed about holiday-related costs.
Still, Spendlove notes that the impacts of inflation haven't been felt evenly.
“Higher-income shoppers continue to have excess money to spend,” he said. Lower-income buyers, on the other hand, “are turning increasingly to borrowing, especially on, like, revolving credit or credit cards.”
A recent Gallup poll showed higher rates of holiday spending among upper-income Americans, as well as parents of children under 18, who planned to spend more than $1,200 on gifts this year.
This split among lower-class and middle-class Americans is also apparent when researchers look at where people are spending their money, Spendlove said.
“We’re kind of seeing this shift – this bifurcation – in shopping where people are, they're either going to Walmart or they’re going to Nordstrom," he said. "And you’re seeing some of those middle retailers are being squeezed out a little bit, like Target."
For shoppers who still have last-minute gifts to buy and are looking to stretch their dollars, Spendlove recommended they go into the store with a budget and a plan.
“Don’t overspend,” he said. “Don’t allow yourself to kind of get caught up in the moment. Go in there, know what you’re going to get, know what the budget is and kind of stick to that.”
That’s advice he said he’d be working to follow himself when he and his family went shopping for last-minute gifts later that day.
“I’m taking the kids out to go to the mall this afternoon, and we’re thinking, ‘OK, we’re going to have to adjust our expectations of what we can get and how much we can spend,’” he said.
