The 2024 presidential election, won by President-elect Donald Trump, is poised to significantly impact the holiday shopping season. CNBC’s analysis of shipping trends and consumer surveys reveals a stark division in economic sentiment between Trump and Harris voters, translating into differing spending patterns. While Trump voters express optimism and plan to increase spending, Harris voters express concerns about the economy and intend to curtail their holiday budgets. This divergence in consumer confidence, coupled with persistent inflation, paints a complex picture of the upcoming holiday retail landscape – one that could see surprisingly strong sales in some regions, yet slower growth overall compared to previous years.
Key Takeaways: A Divided Holiday Season
- Divergent Consumer Sentiment: Trump voters exhibit significant optimism about the economy’s future under his presidency, planning to increase holiday spending. Conversely, Harris voters express pessimism, leading to plans for reduced spending.
- Shipping Data Reveals Regional Differences: Post-election analysis of shipping data shows a remarkable 50.4% increase in package volume in Republican-leaning states, while Democratic-leaning states saw an average decrease of 11.2%.
- Retail Forecasts Remain Cautious: Despite potential gains from increased spending among Trump supporters, overall holiday sales growth is projected to be slowest since 2018, impacted by inflation and a shortened shopping season. Predictions range from a 2.5% to 3.5% increase, but accounting for inflation, real growth might be closer to 0.5% to 1%.
- Inflation Remains a Major Factor: Even for those planning to increase spending, higher prices dampen enthusiasm, with many noting the holiday season being less enjoyable due to financial concerns.
- Category-Specific Variations: Retail experts predict varied performance across sectors, with furniture and home furnishings possibly declining, while apparel and groceries anticipate modest growth.
The Election’s Impact on Consumer Behavior
The 2024 election wasn’t just a political contest; it became a referendum on the economy. The differing economic outlooks of Trump and Harris supporters have directly translated into contrasting holiday spending plans. Amanda Davila, a Harris voter, voiced concerns about student loan repayments and the cost of living, resulting in her decision to reduce holiday spending. In contrast, Armando Duarte, a Trump voter, expressed confidence in economic improvement, anticipating increased spending amongst his peers.
Retailers’ Shifting Expectations
Before the election, retailers expressed significant apprehension about the holiday season, citing the compressed timeframe between Thanksgiving and Christmas and general economic uncertainty. Many issued cautious sales guidance, fearing that a contested election would distract consumers or create market instability. However, President-elect Trump’s decisive victory has altered these predictions. The prevailing optimism among his supporters suggests stronger-than-expected sales, particularly in states where he secured a majority of votes.
Behavioral Finance and Spending Habits
Professor Meir Statman, an expert in behavioral finance, explains the impact of sentiment on spending decisions. He highlights how Republican optimism could propel increased spending, while the pessimism of Democrats might lead to reduced expenditure. This psychological element significantly contributes to the divergent spending patterns observed across different regions of the country.
Analyzing the Post-Election Data: Shipping Trends
Data from Grip, an e-commerce logistics provider, supports the anecdotal evidence. Their analysis shows a dramatic 50.4% surge in shipping volumes to Republican-leaning states in the weeks following the election. Conversely, Democratic-leaning states experienced an average 11.2% decrease. This data reinforces the correlation between political affiliation, economic outlook, and consumer behavior in the immediate aftermath of the election. According to Grip CEO Juan Meisel, “Our data shows how major events like elections can significantly impact consumer sentiment, driving changes in eCommerce shopping behavior and logistics patterns.”
Consumer Surveys: Divergence in Spending Intentions
Surveys conducted after the election further underscore this division. GlobalData’s national survey reveals that 51.3% of respondents believe a Trump presidency will positively impact the economy, with 13.5% stating they intend to spend more during the holiday season. In contrast, only 7.2% plan to decrease their spending. However, other studies suggest a more nuanced perspective. A First Insight survey found that a third of consumers planned to reduce their holiday spending budgets due to election-related concerns. This suggests that uncertainty and anxieties surrounding the election are not irrelevant, despite the more optimistic outlook expressed by a significant number of consumers.
The Holiday Sales Forecast: A Balanced Perspective
The National Retail Federation (NRF) forecasts a 2.5% to 3.5% increase in holiday spending this year. While this might seem positive at first glance, it should be compared to the historical average, and considered in the context of significant economic headwinds. Experts at consulting firms like EY and Bain & Company voice concern, citing the possibility of a more challenging holiday season than anticipated. Isaac Krakovsky of EY projects a “tough Christmas,” noting decreased capital expenditure by major retail clients. Adjusting this for inflation, the real growth might stay around the 0.5% to 1% mark.
Balancing Optimism with Inflationary Pressures
The impact of inflation cannot be overstated. While some shoppers plan to spend more, it’s often because of higher prices rather than an increase in buying activities. Meri Pitts, a college student in Detroit, reflects this by observing that she’s enjoying shopping less due to skyrocketing prices. This sentiment highlights how the current economic climate influences holiday spending, irrespective of political leanings. Inflation has dampened the spirits of many, regardless of their political stance. The overall forecast points to a subdued holiday season, with growth more tempered than in years prior.
Category-Specific Outlooks
The outlook is uneven across different merchandise categories. Bain’s analysis predicts declines in furniture and home furnishings and flat performance in electronics and appliances. Conversely, apparel and grocery are expected to experience slight growth. The recent earnings reports from Abercrombie & Fitch (robust holiday guidance – showing potential growth) and Best Buy (falling short of expectations, illustrating weak electronics demand) further showcase these category-specific differences.
In conclusion, the 2024 election’s outcome has introduced a significant variable into the holiday shopping season. While increased optimism and spending might be observed in certain states, the overall growth appears quite constrained due to inflation, and remains cautious compared to previous years. The season is proving to be a reflection of complex economic circumstances, not a simple tale of holiday cheer.
