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Expect fewer gifts this holiday season

Shoppers expect to pull back on purchasing gifts for their families and friends this holiday season, and that may not bode well for retailers.

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Shoppers expect to pull back on purchasing gifts for their families and friends this holiday season, and that may not bode well for retailers.

More than a quarter of Americans — 28% — say they will spend less on holiday gifts this year compared to last year, Gallup said in a poll. It marks the highest percentage Gallup has recorded since 2012 for Americans who expect to spend less on gifts than they did the year prior. Just 12% of shoppers say they will spend more this holiday on gifts than they did last year.

People expect to spend an average $805 on holiday gifts this year, down from $942 last year at this time, Gallup found in a survey of 1,035 adults conducted Sept. 30-Oct. 15.

Gift-giving is a key driver of holiday sales, and a drop in spending on gifts could lead to a muted season for stores.

There is a wide range of holiday forecasts this year, reflecting the uncertainty around the coronavirus pandemic. Real estate firm CBRE projects that holiday sales will increase less than 2% this year from 2019. Meanwhile, economists at Wells Fargo have predicted an increase of 9% as consumers shift their spending from other areas like travel and services.

Rising coronavirus cases and a stimulus package that has stalled in Congress could mean consumers will spend less on discretionary items like holiday gifts, economists say.

A separate survey echoed the sentiment. Nearly one in three U.S. households say their financial situation is worse than last year, according to a Deloitte survey of 4,012 consumers released earlier this month. As a result, 38% of consumers say they plan to spend less on the holidays, a level not seen since the Great Recession.