US retail sales for the winter holiday season are predicted to surpass $1 trillion in 2022, after hitting record levels in the prior two seasons. Heading into the winter holiday season, the economic outlook is uncertain, as inflation erodes consumer purchasing power and threatens to put a damper on discretionary spending. Similar to 2021, consumers will look to avoid supply chain issues and once again shop earlier this year. This will also prompt retailers to continue extending their promotional calendars, as the winter holiday shopping season stretches earlier and longer.

By now, most consumers have adjusted to life amid COVID-19 and are determined to have a greater sense of normalcy in their holiday celebrations. In the upcoming season, consumers will be ready to embrace the holiday traditions they’ve longed for during the pandemic, including shopping in person and attending family gatherings. In-store shopping levels will continue to rebound, but ecommerce will remain elevated as shopping becomes increasingly multichannel.

Value will take center stage this season, both in terms of convenience and money saved. Mass merchandisers and value-based outlets will have a strong showing, as rising prices will see more consumers shift into new outlets to get the lowest prices. Overall, the season will be a challenging one, but both consumers and retailers have proven their resiliency, and all will be determined to have a celebratory holiday season in spite of inflationary pressures.

• The impact of COVID-19, inflation, supply chain constraints and other market factors on consumer behavior and winter holiday shopping

• How, where and when consumers plan to shop this winter holiday season

• Potential purchases for gifts and holiday celebrations

• How retailers can help consumers prepare for the holidays before and during the season

This Report’s focus is on winter holidays (eg, Thanksgiving, Christmas, Hanukkah and Kwanzaa), as these represent the bulk of total holiday expenditures. For the purposes of this Report, “holiday shopping” refers to expected consumer expenditures on holiday-specific items such as gifts, decorations, seasonal candy and other food, greeting cards and other expenditures.

This Report builds on the analysis presented in Mintel’s Winter Holiday Shopping – US, 2021 and 2020.

Consumer markets have faced an unprecedented level of turmoil in recent years. At the start of 2020, COVID-19 caused massive economic disruption, as various stay-at-home orders were introduced and nonessential businesses were closed. Consumer behavior shifted drastically, with much greater demand for at-home products and delivery services, straining an already challenged global supply chain.

Business operations resumed in most parts of the country in 2021 as vaccines were administered and social distancing restrictions and capacity limitations were relaxed. However, localized surges in case counts and the rapid spread of the Delta and then Omicron variants caused increased business as well as travel restrictions in and out of the US, exacerbating supply chain shortages in many industries.

Early 2022 has seen a decline in COVID-19 cases in the US, while the conflict in Ukraine continues to escalate and more civilians are displaced. The economic fallout from the conflict and subsequent sanctions will include soaring energy prices, worsened supply chain disruptions, and potential shortages of food and other natural resources.

As of March, the Conference Board expects US Real GDP to increase at an annualized rate of 3% for 2022, down from previous estimates of 3.5%. To curb rapidly rising inflation, the central bank is tightening monetary policy and analysts are predicting anywhere from three to seven interest rate hikes this year to limit the supply of money in the economy.

US inflation reached 40-year highs in early 2022, but barring a new, more severe COVID-19 variant or expansion of the conflict outside of Ukraine, those figures should begin to stabilize and eventually fall as we enter the second half of the year. US consumers, however, should expect to see prices remain higher than they have been the past few years, as supply chain disruptions create product and labor shortages. As is often the case, wealthy Americans likely won't see much change to their daily purchasing behaviors. But those consumers unable to withstand price increases will have to choose between cutting back and increasing debt.

This Report includes consumer research fielded in March/April 2022 and was written in May-June 2022. The analysis reflects the state of the market and pandemic during this time.