Growth, Marketing & Sales and Retail Practices

US holiday shopping
2022: ’Tis the season
to be (cautiously)
optimistic
Despite continued economic uncertainty, US shoppers are
looking forward to spending for the holidays. Retailers that
offer good value will come out on top.

This article is a collaborative effort by Colleen Baum, Joyce Chai, Tamara Charm,
Kelsey Robinson, and Tom Skiles, representing views from McKinsey’s Growth,
Marketing & Sales and Retail Practices.

October 2022 © Steve Prezant/Getty Images

As the weather cools and the air turns crisp, US retailers are once again — Holiday shopping has already begun. Concerns about ongoing
facing challenges for the holiday-shopping season. The past couple inflation and product availability—along with retailers’ early planning
of years saw severe, systemic supply chain disruptions and high case this year—have encouraged US consumers to shop earlier than ever:
rates for COVID-19. However, the landscape is more nebulous this time. 56 percent have already started shopping in October instead of
Consumer demand has softened, while inventory levels are higher than waiting until later in the season.
they’ve been in years, and company earnings continue to face scrutiny
from Wall Street as some profits decline. — Consumers are looking for value. Given economic uncertainty,
consumers are being more surgical about how they spend. Nearly
Meanwhile, US consumers continue to send mixed signals. Their half of US survey respondents say they would switch stores if they
sentiment about the economy remains historically low, and they still have found a better price elsewhere.
concerns about inflation. They’re looking for savings by trading down
and seeking value where they can find it. But many of them have cash This Consumer Pulse Survey was in the field from September 27 to
to spend—and they say they’re not just willing but eager to spend and September 29, 2022, and garnered responses from more than 1,000
splurge. People in the United States are more excited for the holidays consumers in the United States (sampled and weighted to match the
than they’ve been in years. general US population, ages 15 to 74). These insights build on the work
we have undertaken since March 2020, when we began to regularly
With this divergent dynamic in mind, many retailers have kicked off the conduct consumer surveys and combine our research and analysis with
holiday-shopping season earlier than ever. Some retailers are doubling third-party data on US spending to glean insights into how consumer
down on membership benefits to drive loyalty and increase their share sentiment has shifted since the beginning of the COVID-19 pandemic.
of wallet. Others are announcing price match guarantees and widening
return windows during the holidays to reach more consumers. Retailers
are also making adjustments that are less visible to consumers: by using
data and investing in automation to predict shopping preferences and

After nearly three years of suppressed

manage inventory, or by hiring fewer seasonal employees in anticipation
of slower growth.

This article presents findings from our latest Consumer Pulse Survey;
they show that there are good reasons for US retailers to be optimistic.
behavior resulting from the COVID-19
The following are the key discoveries:
pandemic, people are primed to go all
— The holidays are back. After nearly three years of suppressed
behavior resulting from the COVID-19 pandemic, people are primed
out to celebrate for the holidays.
to go all out to celebrate for the holidays. In the survey, 55 percent
of US respondents say they are excited about holiday shopping, and
most people have the savings to spend.

US holiday shopping 2022: ’Tis the season to be (cautiously) optimistic 2

 Web 2022
ConsumerPulseOCt
Exhibit 1 of 7

Most consumers continue to grow their nest Most US

Most UShouseholds’
households’savings,
savings,with
with the
the exception
exception of low-income
of low-income consumers’,
consumers’,
eggs. As people pulled back on spending continued
continuedto
togrow
growininthe
thesecond quarter
second quarterof of
2022.
2022.
throughout the COVID-19 pandemic and
received stimulus checks from the government, Short-term holdings of cash equivalents in US households, by income group, $ trillion1
their savings went up. That trend continues. US
families have added more than $4 trillion to 8 Q4 2019–Q2 2022 Q4 2021–Q2 2022
their coffers since late 2019. While middle- and change, $ billion change, %
higher-income households’ savings continue to 7
2,863
grow, lower-income households are beginning
to draw down on their savings. 6

Even though many US consumers are in a 5

better financial position than they were before >~$140,000
4 7.1
the pandemic, inflation has remained above
8 percent since March 2022. The costs of day-
to-day necessities, such as groceries and gas, 3
have dramatically increased. In response to 1,110 11.6
inflation concerns and skyrocketing expenses, 2
74 percent of US consumers across all ages ~$50,000–
1 ~$140,000
and income groups say they are trading
down—mostly by adjusting quantities for <~$50,000
126
0
essential goods and delaying purchases for
discretionary goods. 2019 2020 2021 2022 –3.7
¹Includes money-market-fund shares and checkable deposits and currency. Income groups correspond to 80–99th, 40–80th, and 0–40th percentiles in US in
2020. Total cash equivalents measured in the household-based estimates marginally underestimate total holdings as measured in institution-based flow of funds
accounts.
Source: US Bureau of Labor Statistics; US Federal Reserve Board; McKinsey analysis

US holiday shopping 2022: ’Tis the season to be (cautiously) optimistic 3

 Web 2022
ConsumerPulseOCt
Exhibit 2 of 7

It’s the most wonderful time of the year. For the AlthoughUS
Although USconsumers
consumersare
are concerned
concerned about
about thethe economy,
economy, they
they areare excited
excited
first holiday season since the pandemic started, for
for holiday
holidayshopping.
shopping.
US consumers are feeling bright and cheery.
More than half of those surveyed say they are US consumers eager or excited for holiday-shopping season, 2021 2022
eager or excited for the shopping season, up 2021 and 2022, % of respondents1 (n = 2,095)² (n = 1,073)³
from around one-third last year.
Overall By annual income By generation⁴
There’s a general uptick in holiday spirit across +28 66
all US income and age groups. Low- and +14 64 +15 62
medium-income consumers each saw a +21 55
21-percentage-point increase in optimism. +21 52 50
percentage 47 +14 48
Baby boomers’ rate of optimism more than points +21 46 +25 46

doubled since 2021, with nearly half feeling 38

34 34
good about holiday shopping this year. Higher- 31
income and younger consumers are especially 25
21
excited, with around two-thirds eager or excited
for the holidays.

Overall <$50,000 $50,000– >$100,000 Gen Z Millennials Gen X Baby

$100,000 boomers
¹Question: “Which best describes your general attitude toward the upcoming holiday-shopping season [2022 season]?” Selected from “anxious,” “stressed,”
“neutral,” “eager,” and “excited”; excludes “other” responses. ²Members of silent generation combined with baby boomers (baby boomers+); <$50,000, n =
1,010; $50,000–$100,000, n = 623; >$100,000, n = 462; Gen Z, n = 232; millennials, n = 602; Gen X, n = 550; baby boomers+, n = 711. ³<$50,000, n = 267;
$50,000–$100,000, n = 368; >$100,000, n = 438; Gen Z, n = 127; millennials, n = 337; Gen X, n = 309; baby boomers, n = 300. ⁴Members of Gen Z are aged
15–25, millennials are aged 26–41, members of Gen X are aged 42–57, baby boomers are aged 58–74, and members of silent generation are aged >74.
Source: McKinsey Consumer Community Pulse Survey, Sept 27–29, 2022, n = 1,073, sampled and weighted to match US general population aged 15–74;
McKinsey COVID-19 US Pulse Survey, Oct 9–15, 2021, n = 2,095, sampled and weighted to match US general population aged ≥18

US holiday shopping 2022: ’Tis the season to be (cautiously) optimistic 4

 Web 2022
ConsumerPulseOCt
Exhibit 3 of 7

Hitting the holiday road. As pandemic fears and Americans

Americansare
aremore
morewilling
willingto to
travel thisthis
travel holiday season.
holiday season.
isolation have ebbed this year, some people are
finally ready to get out of their homes and go US sentiment on holiday travel, 2021 and 2022,¹ % of respondents (n = 1,072) 2021 2022
actual planned
see loved ones in person for the holidays. While
30 percent of US survey respondents say they 42
–12
will still limit in-person gatherings, compared
with a year ago, there’s a 12-percentage-point
+4 32
increase in those who say they plan on traveling
30
to see family or friends. The majority of that 28
increase comes from people who say they are
going to large gatherings. +8 21

percentage 17 17
The increased comfort with travel this year points 13
over last is especially noticeable among Gen
Zers (16 percentage points higher), millennials
(six percentage points higher), and those who
have higher incomes (14 percentage points
higher). This willingness to leave home may Travel to and attend Travel to and attend No travel; attend No travel; attend limited
large get-together limited get-together get-together with get-together with
drive a resurgence in foot traffic to stores. Of
with family and friends with family family and friends immediate family only
US respondents, 42 percent say they intend
to browse in stores, compared with 37 percent
last year. ¹Question: “Which of the following best describes your holiday plans for this year [2022]? Which of the following best describes your holiday plans last year
[2021]?” Excludes respondents who selected “I am unsure what my holiday plans are.”
Source: McKinsey Consumer Community Pulse Survey, Sept 27–29, 2022, n = 1,073, sampled and weighted to match US general population aged 15–74

US holiday shopping 2022: ’Tis the season to be (cautiously) optimistic 5

 Web 2022
ConsumerPulseOCt
Exhibit 4 of 7

Ready to spend. Despite concerns about the Young

Young and
andhigh-income
high-incomeUS USconsumers
consumersare ready
are to splurge
ready thisthis
to splurge
economy, renewed holiday cheer coupled with holiday-shopping season.
holiday-shopping season.
growing savings means that US consumers
want to spend. Nearly 40 percent of survey US consumer intent to splurge on purchases in holiday-shopping season,¹ by annual income
respondents say they intend to splurge for and generation, % of respondents
themselves or for others. This intention to spend
62
extra on items is especially evident among Gen
Zers and millennials.
51
Overall: 39 45 Overall: 39

35 35
32

17

<$50,000 $50,000– >$100,000 Gen Z Millennials Gen X Baby

(n = 267) $100,000 (n = 438) (n = 127) (n = 337) (n = 309) boomers
(n = 368) (n = 300)

Note: Members of Gen Z are aged 15–25, millennials are aged 26–41, members of Gen X are aged 42–57, and baby boomers are aged 58–74.
¹Question: “Do you plan to splurge on purchases for yourself or others this holiday season [2022 season]?”
Source: McKinsey Consumer Community Pulse Survey, Sept 27–29, 2022, n = 1,073, sampled and weighted to match US general population aged 15–74

US holiday shopping 2022: ’Tis the season to be (cautiously) optimistic 6

 Web 2022
ConsumerPulseOCt
Exhibit 5 of 7

October is the new November. US consumers US

US consumers
consumersare
areshopping
shoppingfor
forthe holidays
the earlier
holidays than
earlier ever.
than ever.
are already spotting jingle bells and tinsel in
store aisles. Everything is happening earlier US consumer intent for holiday-shopping timing,¹ % of respondents 2021 2022
(n = 2,095) (n = 1,073)
this year. Around one-third of US survey
respondents say they plan to start shopping 56
+11
sooner compared with last year. Instead
percentage
of waiting until the Black Friday sales of points 45
Thanksgiving weekend, 56 percent say they –7 42
will have already started their holiday shopping
35
before October is over.

–2 11 9

–1 2 1

October November December January

¹Question: “When do you plan to start your shopping for the seasonal holidays this year?”
Source: McKinsey Consumer Community Pulse Survey, Sept 27–29, 2022, n = 1,073, sampled and weighted to match US general population aged 15–74;
McKinsey COVID-19 US Pulse Survey, Oct 9–15, 2021, n = 2,095, sampled and weighted to match US general population aged ≥18

US holiday shopping 2022: ’Tis the season to be (cautiously) optimistic 7

 Web 2022
ConsumerPulseOCt
Exhibit 6 of 7
Consumers are shopping early to offset US consumers
US consumersare areshopping
shoppingearlier
earlier
in in
thethe holiday
holiday season
season because
because of
of concerns
inflation and supply concerns. Some
consumers still worry about holiday shipping
concerns
about aboutand
inflation inflation
supply and
chainsupply
issues.chain issues.
delays (perhaps because of residual scars Reasons for US consumers to start holiday shopping earlier in 2022, % of respondents (n = 301)1
from last year’s supply chain woes). However,
most—more than 50 percent—of respondents
who are shopping earlier this year say they’re
doing it because they have concerns about
increasing prices or product availability as the
holidays get nearer. 52 51 42 39 27

Several retailers have already moved their

promotions to earlier in the year to match Concerned about Concerned about Concerned about Want to spread Of millennial
this intent to spend earlier. Amazon put on prices increasing as product availability shipping lead time purchases over a consumers: want to
holidays get closer few months do something fun
its earliest-ever holiday-shopping event, the right now
Prime Early Access Sale, in mid-October. Both
Target’s Deal Days and Walmart’s Deals for ¹Asked of surveyed US consumers planning to shop for holidays earlier in 2022 than they did in 2021. Question: “What are the primary reasons you plan to shop
earlier for the holidays this year [2022]?”
Days campaigns led up to and surrounded Source: McKinsey Consumer Community Pulse Survey, Sept 27–29, 2022, n = 1,073, sampled and weighted to match US general population aged 15–74
Amazon’s promotions.

US holiday shopping 2022: ’Tis the season to be (cautiously) optimistic 8

 Web 2022
ConsumerPulseOCt
Exhibit 7 of 7
Consumers are shopping deliberately and Most US
Most USconsumers
consumersexpect
expecthigher
higherprices
prices this
this holiday-shopping
holiday-shopping season
season and
looking for value. Given that the holiday-
shopping season has started so early, US
and plan
plan to shop
to shop on promotion
on promotion and switch
and switch retailers
retailers as a result.
as a result.
consumers have more time than usual to US consumers expecting higher prices this holiday-shopping season,¹ % of respondents (n = 1,042)
exercise discernment about what they buy.
Perhaps unsurprisingly with the increase of
72
in-person gatherings, 27 percent of consumers
anticipate that they’ll spend more on essential
US consumers’ anticipated holiday-shopping actions with higher prices, % of respondents (n = 750)2
goods, such as food, this year than they did last
year. That group anticipates their share of wallet
around accessories, cosmetics, and toys to get
hit the hardest. 44 43
28 23
21 18
Given the current inflationary environment,
72 percent of US survey respondents expect to
pay more for gifts this year, so they’re looking Only purchase Switch store or go Switch brand for Not purchase Wait until after Purchase item
for bargains. Of those consumers, 44 percent item if on to online retailer similar item at item; buy holidays to regardless of
promotion (sale for same item at lower price completely purchase if item higher price
say they’re seeking sales or coupons, and or coupon) lower price different item goes on sale
43 percent say they will switch retailers if they
find a lower price elsewhere. ¹Question: “Thinking about the gifts you plan to purchase for yourself or others this holiday season [2022 season], do you expect prices to be higher, the same,
or lower than last year [2021]?” Selected from “significantly higher prices,” “somewhat higher prices,” “same prices as last year [2021],” “somewhat lower prices,”
and “significantly lower prices.”
²Asked of surveyed US consumers expecting prices to be significantly or somewhat higher than in 2021. Question: “If you expect the prices of gifts to be higher
US consumers are also much more likely than this year [2022], will you take any of the following actions?”
last year (by 31 percentage points) to use Source: McKinsey Consumer Community Pulse Survey, Sept 27–29, 2022, n = 1,073, sampled and weighted to match US general population aged 15–74

retailer websites. They are also more likely

(by ten percentage points) to use promotional
emails from relevant retailers to browse and
compare prices before purchase. Additionally,
they plan to go to big-box or discount retailers
to save money.

US holiday shopping 2022: ’Tis the season to be (cautiously) optimistic 9

Consumer-facing companies can capitalize on US consumers’ optimism
and willingness to spend during the holiday season by focusing on Delivering value will help retailers
providing value:
win this holiday-shopping season.
But for long-term health, companies
— Adapt to your consumer. Not all consumers are the same, and
retailers can tailor their approaches to the people they want to reach.

should also consider the trade-offs

Higher-income consumers have more to spend and are more willing
to splurge on discretionary items, whereas lower-income consumers
are more likely to give holiday gifts that fill a need. Given people’s
propensity to delay purchases, retailers should focus on inspiring
consumers with the right items at the right price and at the right time.
between the holiday frenzy and
— Set earlier, wider-reaching promotions. If retailers haven’t already
the longer-term potential impact of
done so, they should kick off the holiday-shopping season now
with distinctive value, differentiated promotions, and personalized
any changes on brand image and
offerings. US consumers are shopping already and looking for value,
so building on their enthusiasm early could lead to momentum. overall profitability.
Leveraging excess inventory to trigger the holiday spirit now can
have the added benefit of clearing store space for new arrivals after
Black Friday in late November. Providing unique in-store offerings
and services could reach more consumers now that foot traffic is
back up.

— Allow for more purchasing flexibility. By offering convenience

and accessibility to value, retailers can reach more consumers and
garner more loyalty. That could include employing a price match
guarantee or offering flexible fulfillment options, such as in-store
pickup, expedited shipping toward the end of the holiday season, and
temporarily widening the window for returns.

— Maintain a long-term pulse on trade-offs. Delivering value will

help retailers win this holiday-shopping season. But for long-term
health, companies should also constantly consider the trade-offs
between the holiday frenzy and the longer-term potential impact of
any changes on brand image and overall profitability. Understanding
details on customer acquisition during the holidays and deploying
customer-relationship-management tactics soon after the holidays
can help retailers retain loyalty.

Title of literature 10
Colleen Baum is a partner in McKinsey’s New
York office; Joyce Chai is an associate partner in
the Bay Area office, where Kelsey Robinson is a
senior partner; Tamara Charm is a partner in the
Bostonbyoffice;
Designed GlobalTom
McKinseyand Skiles is a capabilities
Publishing
Copyright © 2021 McKinsey & Company. All rights reserved.
and insights expert in the Chicago office.

The authors wish to thank Katie Boys, Sara

Chamberlain, Andrea Leon, Jason Rico
Saavedra, Daniela Sancho Mazzara, and Meera
Singh for their contributions to this article.

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