As you've no doubt noticed, everything is more expensive this holiday season, especially gas prices.
The ongoing pandemic has created a supply chain back-up that is creating scarcity and, in turn, driving up prices this holiday season.
While sales seem to be starting earlier and earlier, the holiday season officially kicks off on Black Friday. So with households feeling a budgetary pinch, should we expect this holiday shopping season to be a bit softer than years past?
"Many of us are aware of our increasing inflation as it hits our grocery bills, energy costs, and other expenses, but will it have an impact on your holiday plans?" wonders Baruch Silvermann, personal finance expert and CEO of The Smart Investor.
"Not only do you need to consider the cost of gifts, extra food and going out, but you may also need to travel to see your loved ones.”
High gas prices have an annoying tendency to make everything more expensive, as the increase ultimately gets passed along to the consumer, notes Silvermann.
He says that could "have a real impact on our holiday shopping.
"Not only are people likely to need to watch their wallets a little more to compensate for needing more cash to fill their own tanks, but retailers are also likely to need to adjust their prices to account for the higher transport costs," he says.
"You may have already noticed the higher prices on regular groceries, and these increases are likely to also appear on holiday food, decorations, and gifts."
To Silvermann's point, The Balance recently surveyed the price of some popular holiday gifts. Some items, such as iPhones ($799) and the hard-to-get Playstation ($499) will cost the same as last year.
In both instances that is a $100 increase from their 2019 cost. Other items, such as Levi's 501 jeans, have jumped this year from $44.32 to $64.50.
But just as Cyber Monday and other online sales haven't made Black Friday irrelevant, Jonathan Fishman, a retail expert and co-founder of the Business development firm Bizydev, thinks that the increase in gas prices will ultimately not do too much to dampen consumer enthusiasm.
"Black Friday serves as a chance for stores to offer compelling discounts that will incentivize customers to come out and shop," he says. "I would expect shoppers perceived potential savings to exceed the incremental cost of gas and therefore not hinder holiday shopping this season."
The households that are most likely to reconsider the in-person retail experience, Fishman speculates, are the families that live in areas with limited access to big stores and marque gifts.
In years past, it was common for these families to plan road trips to get their shopping done, and perhaps make a whole weekend out of the experience.
But Fishman thinks that if those families stay home and focus on online sales this year, it won't be solely be because of gas prices.
"Families that typically travel to big cities during the holiday season to take advantage of days like Black Friday are more likely to assess the main drivers of overall cost of travel [like] hotels, food and beverage, and experiential) as compared to focusing on the rise in gas pricing," he says.
As we reported yesterday, Black Friday has a sentimental meaning to many Americans that has been built up over years, and acts as an unofficial marker of the season.
This sort of pull can be hard to resist for people.
Plus, after spending most of 2020 self-isolating and shopping online, many consumers are eager to get back out there and regain a sense of normalcy, even if it costs more this time around.
"I think consumers have been exposed to so much online brand marketing over the last 12 months that they are likely to want to come out this season and experience products and merchandise in person," says Fishman.
"I think people are always weighing their budgetary capacity against their aspirational purchasing desires during the holiday season. I don't expect this year to be anything different."