123RF: Svetlana Kolpakova/Stock Image
123RF: Svetlana Kolpakova/Stock Image

San Francisco — Concert tickets in your stocking and a travel itinerary under the tree? No way: It is 2020, and stuff is back in style.

While spending on experiences was the rage in recent years — sparking a number of retailers to rethink their central business strategies — Covid-19 has disrupted the trend, data from Deloitte’s holiday survey confirms.

Average US household spending this holiday season is expected to decrease 7% from 2019, with a sharp 34% drop in travel spending accounting for most of the decrease, according to Rod Sides, a Deloitte vice-chair. Some of the money normally spent away from home will go towards non-gift purchases, such as home furnishings and seasonal décor.

“We’re seeing a shift in terms of what people are buying,” Sides said. “Folks are focused on the home and a little more decorating. Destination travel isn’t there like it has been in the past.”

A season-long move away from experiences is good news for companies such as Bed Bath & Beyond, which has reported a sales rebound as consumers stock up on items for their homes. It could even give a boost to recent retail laggards, such as Gap and Marshalls-owner TJX, which have had more trouble luring homebound customers who are replacing wardrobes far less frequently this year.

The shift was apparent in September retail sales which rose at the fastest pace in three months. The broad-based gain is likely to reflect consumers tapping savings and funds from temporary extra jobless benefits, plus delayed back-to-school shopping.

“With less spending on personal services such as travel and entertainment outside the home, some of that money is shifting to retail cash registers,” chief economist at the National Retail Federation, Jack Kleinhenz, said.

Rebecca Shaw, a 25-year-old social media manager in Philadelphia, is one shopper having to rethink her holiday spending plans. She normally loves gifting family members experiences for Christmas, such as indoor skydiving vouchers or sporting event tickets. But with the coronavirus still spreading, she is considering Visa gift cards or paying several months of subscriptions as Christmas presents.

“Material things can go missing, but memories can be there forever,” said Shaw. “I’d rather make memories doing something like painting with a twist or going to a museum instead of buying a T-shirt that may not fit or something that can expire.”

Bloomberg

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