Stopping the Inflation Impact on Holiday Spending

Americans love holidays and enjoy spending time with family and friends. However, the holiday season is also about shopping, searching for gifts, decorations, and spending money.

While inflation rates may finally be cooling a bit, the inflation impact on holiday spending has been well recorded over the last few years. Holiday shopping survey by PissedConsumer reveals that 74.1% of respondents think inflation may impact their behavior. Navigating inflation during the holiday season can be tricky, and that’s why smart holiday shopping is so important. 

While inflation has likely boosted holiday spending, that’s not the only potential issue customers face. Holiday shopping insights tell us that consumers spend the most around Christmas, Mother’s Day, and Halloween – in that order. That’s likely why Christmas and Halloween scams are among the most common consumer issues to navigate. 

With scams, continually rising prices, and shrinkflation all in the mix, holiday cost-saving strategies are more important than ever. We have compiled some budget-friendly holiday tips to help beat the rising inflation costs. 

Key Insights

• The inflation rate is finally cooling. As of August 2024, the annual inflation rate in the United States was 2.5%. This marks the lowest inflation rate since February 2021. 
• Both inflation and shrinkflation have impacted the purchasing power of customer spending. 
• Strategies to minimize the impact of inflation include buying in bulk, using smart shopping tools, timing purchases well, and comparing prices among retailers. 

What is Inflation and Shrinkflation?

Inflation is a general rise in the price of goods and services over a period of time. The term "inflation" refers to an increase in the money supply and is often used as a synonym for rising prices. According to expert insights by Dr. Patrick Penfield, a Professor of Practice, Supply Chain Management and the Director of Executive Education at the Whitman School of Management, Syracuse University, 

We’ve seen all these price increases throughout the supply chain, and that’s why the consumer’s getting hit with all this cost that’s gone up.

Inflation occurs when there is too much money in circulation relative to the demand for goods and services. This means that there are more dollars available than desired goods, so they start bidding up the prices.

Shrinkflation, on the other hand, is the diminishing size of the item you’re purchasing. As a customer experience, this might mean the price for the holiday cookies may not have changed much, but you’re getting fewer items in the pack. When it comes to shrinkflation, often, according to Dr. Penfield, “you’re not going to be upset because a lot of us, unfortunately, don’t look at sizes.”

However, many PissedConsumer users shared their negative experiences with shrinkflation. For example, Oreo clients have pointed out that the amount of goods per package has been reduced. In review #3876948, one consumer mentioned that their package was missing a few cookies.

In reply to the review, another consumer shared that they faced the same issue. Their party-size package of Oreos was "missing about 10-12 cookies."

Consumer insights tell us that in some cases, shrinkflation has combined with inflation to create a double-whammy—prices have gone up, and you’re getting less despite spending more. 

How does inflation impact holiday celebrations?

Holiday spending reflects both trends. Prices on consumer items are going up, and customers are getting less value for their money. In a recent review #4156976 about Keebler cookies, a consumer claimed that the “cookies are still good” but complained that they are “almost spoon size right now.” They pointed out that the company will “use the original packaging from when the cookies used to be full size" but says the cookies are much smaller.

This is not an isolated example. There are forums on Reddit dedicated to discussing the impacts of inflation and shrinkflation. Common holiday purchases show up on these forums frequently. For example, a customer pointed out that two identical containers hold different amounts of cinnamon from one year to the next—originally 8.75oz and now 7.12oz. To add insult to injury, the cinnamon with the reduced amount is advertised as being “3x MORE” than an even smaller size container.

Source: reddit.com

To navigate the impacts of inflation and shrinkflation, Dr. Penfield suggests consumers “shop around and look to see where the best deals are,” and there are additional options as well to reduce costs. 

Tips for a Budget-Friendly Holiday Celebration

Look through these ideas and shopping tips to avoid extra costs while preparing for the holiday season.

Costumes can be free

Try swapping! Because costumes are typically only worn a handful of times (or once), they are usually in like-new condition. You can organize a swap with friends and classmates or use a platform like Facebook to cast a wider net.

Reign in the spending on costumes

If you need to buy costumes, give kids their own spending money. If they have a finite amount, they will become instant smart shoppers! Bring the little ones to the store with you and tell them how much they may spend. With teens, because they often like to shop on their own, send them a Halloween-themed GiftYa, which is a digital gift of spending money that you send by text. Once your teen receives the text, they pair the GiftYa with their debit card and go shopping at the store you’ve designated, or they can change the retailer. 

Use savings tools

One of the easiest ways to save while you shop online or in-store is to use a deal platform, like CouponCabin.com. For online shopping, install their free browser extension, which will alert you to available cashback offers and coupons as you browse. When you’re in-store, use the in-store section on their app.

Buy in bulk

If you want to save money for your holiday celebration, buying in bulk can be a useful tip. Purchasing your candy or gifts wholesale will save you a lot. Also, when you purchase decorations in larger quantities, you often get a lower per-unit cost, which can significantly reduce your overall expenses for the celebration.

DIY

If you’re handy, you can make your own treats or decorations. There are so many helpful YouTube videos, or go to the website of a craft store, like Michael’s or JOANN, to check out their how-to videos.

Be patient

The longer you wait, the bigger the discount. The selection will be thinner, but the prices will be significantly lower if you wait until the days right before the holidays as retailers  try to sell holiday merchandise.

Join PissedConsumer Club

Another tip for navigating holidays season is finding like-minded shoppers. When you join PissedConsumer Club, you have access to smart consumer tips that may help you navigate the worst impacts of inflation and avoid scams. You also gain access to a community of support around a range of consumer issues and effective resolution practices for all holiday and non-holiday buying. 

Keep Holiday Shopping Smart

The holidays bring us together and give us a reason to celebrate. Extra spending around the holidays is expected, and holiday shopping insights tell us this year isn’t expected to be any different. Higher prices and the potential for scams don't mean you should enjoy your holiday less—it is simply an opportunity to spend wisely to make the holidays more affordable.