Research from Principal Financial Group ® released today indicates higher stress levels and less holiday spending among U.S. consumers as many continue to navigate the economic impacts of COVID-19. For those who are planning to spend, a majority will do so online and are decreasing expenses on travel, dining out, and entertainment.
"2020 was a challenging year for many individuals, families, and businesses, and it's not surprising that many are having to change their typical holiday spending habits," said Sri Reddy, senior vice president, Retirement and Income Solutions at Principal ®. "While it can be difficult to cut back, particularly during this time of year, less spending today can help make 2021 less financially stressful and support a more secure, long-term financial future."
For the past three years, Principal has taken a pulse of the general consumer market just prior to the holiday season to understand sentiment and outlook, as well as overall holiday spending plans. This year, COVID-19 related questions were added to learn about the direct impact on shopping intentions.
Key 2020 survey findings
- More than 10% of consumers are not planning to shop this holiday season. Consumers cite several pandemic-related factors influencing holiday shopping decisions, including financial strain (29%), unemployment and less pay (15%), and general COVID-19 concerns (14%).
- Of those who do plan to shop, they say they'll spend less than previous years and will shop differently. More than 70% will do so via online shopping. Both employed and unemployed consumers plan to spend less.
- More consumers are reporting high levels of stress related to holiday expenses compared to historic trends. The number of consumers who have a great deal of stress or are moderately stressed increased by 14% when compared to 2019. Those who are unemployed are most stressed, while those who are retired are least stressed.
- During this holiday season, consumers increased spending for food/groceries and home improvements in lieu of travel, entertainment, gas, and dining out.
Consumers share 2021 financial plans
Financial resolutions for next year are similar to 2020 goals, with top priorities being saving more each month (42%), reducing spending (40%), and paying off credit card debt (30%). Those with kids or those with incomes greater than $50k were significantly more likely to develop resolutions. Those 55+ were least likely to make a resolution (26%).
Heading into the new year, consumers are less concerned about gas prices, immigration, terrorism, health care changes, and personal data breaches than previous years. Instead, top consumer concerns include politics (47%), staying healthy (43%), economic uncertainty (42%), and food prices (40%) in 2021.
"As we approach 2021, we'll continue to work with customers to build on past financial decisions and help them feel more secure and confident in those that are ahead," said Reddy.
Access the full report here.
The Holiday Spending & 2021 Financial Outlook Methodology
The Holiday Spending & 2021 Financial Outlook results come from an online CARAVAN survey of 1,003 U.S. consumers over the age of 18. The survey was conducted by Engine Insights from October 21 - 23, 2020. Completed interviews are weighted by 5 variables: age, gender, geographic region, race, and education to ensure reliable and accurate representation of the total U.S. population (18 years of age and older). Each respondent is assigned a single weight derived from the relationship between the actual proportion of the population based on U.S. Census data with a specific combination of the 5 variables listed above. All sample surveys and polls may be subject to multiple sources of error including but limited to sampling error, coverage error, error associated with nonresponses, error associated with question wording and response options, and post-survey weighting and adjustments.
Principal helps people and companies around the world build, protect, and advance their financial well-being through retirement, insurance, and asset management solutions that fit their lives. Our employees are passionate about helping clients of all income and portfolio sizes achieve their goals—offering innovative ideas, investment expertise, and real-life solutions to make financial progress possible. To find out more, visit us at principal.com.
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