MINNEAPOLIS — Inflation is weighing on the minds of holiday shoppers across the country this year, but according to a new survey, it doesn't appear to be weighing as heavily on the wallets of Twin Cities shoppers.
The holiday shopping survey conducted by Deloitte, found that Twin Cities consumers expect to spend 20% more on gifts, holiday supplies and experiences this year, for a household average of $1,463. That would surpass the national average and the region's pre-pandemic high.
Matt Marsh, managing partner of Deloitte's Minneapolis office, says Minnesota's historically low unemployment and recent wage growth across income groups were among several factors that gave shopper optimism.
"The economy in Minnesota is really diverse and balanced," Marsh said. "It's typically pretty strong, even when the rest of the country is down, so we're worried about inflation but the consumer in Minnesota is feeling pretty good about the holiday season. They're worried about how 2023 is going to look, but they feel pretty good right now."
Marsh says inflation also plays a big role in the spending increase. According to the survey of 452 Twin Cities consumers, 78 percent expect to pay higher prices this holiday season. They plan to cut back from an average of 14 gifts in 2021, to 10 gifts this year, but they don't plan to cut back their budgets in the same way.
Marsh: "They are going to buy fewer items but spend more."
Kent Erdahl: "We're coming off an election in which everyone is really trashing polling. Do you have confidence that this is going to bear out?"
Marsh: "I do actually, I'm pretty confident in it?"
Professor George John, with the University of Minnesota's Carlson School of Management, is not as confident.
"I wish it were true," John said. "My instincts tell me it's probably a dollar too far and a percentage too far. It's optimistic, to say the least."
Professor John points to historical trends, showing Twin Cities shoppers consistently spend less than the national average. That trend would reverse dramatically if the survey turns into reality.
John: "You know, you expect a certain kind of bouncing up and down and that's too big a bounce. Twenty percent would be shocking."
Erdahl: "So when are we going to know if this is accurate?"
John: "Around Martin Luther King Day is when we really can figure out what happened during the holiday season."
Marsh: "Mid-January, we would know really well."
Erdahl: "Alright, can we check back in with you?"
Marsh: "I'd love to. You can audit our numbers."
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