As many across the country are more concerned about high inflation and an unstable economy, Twin Cities shoppers are expected to throw caution to the wind, Deloitte says.
The professional services firm says people in the Minneapolis-St. Paul area will increase their holiday spending a staggering 20% to $1,463, surpassing pre-pandemic levels and beating the national average.
If it pans out, that would be a stunning change of behavior by Twin Cities shoppers — and a boon for area retailers. Minneapolis-St. Paul has trailed the nation in holiday spending since 2017, when Deloitte first started gathering holiday shopping survey data in the region.
"The thing about Minnesota ... it's a very diverse economy and so I think the [economic] highs and lows aren't nearly as severe here," said Matt Marsh, managing partner of the Minneapolis office of Deloitte. "And then if you look at wage growth, you are still seeing a lot of wage growth."
But Deloitte also turned up caution signs about the holiday season. Its survey found 44% of local respondents said they are in a worse financial situation now than last year. And to navigate higher prices, Twin Cities shoppers plan to cut their gift list from 14 items last year to about 10 this year.
The Twin Cities area is an outlier compared to the Midwest in general in which holiday spending is predicted to dip 4%, Deloitte said. On the West Coast, holiday spending will fall 16% and in the Northeast drop 1%. Only the South will see a notable rise, with about 16% growth in spending compared to last year.
Household holiday spending nationally was estimated at $1,455, a decrease of less than 1% compared to last year, Deloitte said.
Retail analysts have predicted that some of the holiday spending numbers are not due to people buying more things but because of the general higher cost of items. Year-over-year consumer prices rose 8.2% in the United States in September and 7.4% in the Minneapolis-St. Paul region.
