Trend 1:

Earlier holiday shopping preparations 

In a shift from last year, we expect consumers are planning to kickstart their holiday preparations earlier. In the US, for example, 56% of US consumers report that they’ll plan their shopping ahead of time.  

The rationale behind this is economically driven— many people are cash-strapped and taking on more debt globally. Today’s budget-conscious shoppers may not be able to afford to allocate all of their holiday spending to large, last-minute spending. Anticipate the potential of more shoppers starting earlier, pacing their spending throughout the next few months.  

This shift could see more individuals start thinking weeks and months ahead, making trade-offs around what will last or what purchases can be molded around a holiday budget spread across multiple periods of payment.  

Retailers and CPGs can adapt by offering options to accommodate consumers who will be spacing out their holiday shopping. In practice, this could manifest in many ways, for instance, companies could extend the availability window of holiday assortments throughout the season and consider extending or adopting flexible return policies from now through to the weeks following holiday moments. 

Trend 2:

Consumers plan to spend less on holiday gatherings  

57% of consumers surveyed by NIQ say they’ll be in the same or worse financial situation by the end of 2023, showing that despite some resilience, economic optimism is still being pressured. As a result, most global consumers (84%) are prepared to spend less, the same, or nothing on holiday gatherings and celebrations this season.  

These “calculated spenders” will make more thoughtful purchases and focus on keeping overall spending in check. For some, these recent socioeconomic challenges will necessitate a reset to past holiday spending habits.  

There’s a growing group of consumers who are more stressed than ever before (27%), less interested in achieving certain life milestones (18%) and avoiding waste by only purchasing what they know they will use (55%). These mindsets of practical, purposeful consumption could limit year-end spending, and drive creative solutions like homemade gifts, second-hand gifting, or using everyday household essentials as holiday gifts.  

This festive season, companies have the runway to innovate how their brand fits into this “do more with less” mentality, to prepare for the future, or to find affordable means to seek distraction or holiday happiness without breaking their budgets.    

Trend 3:

CPG as a holiday hotspot for consumer resilience  

Despite prevailing cautiousness among global consumers, there is a pocket of resilience among the approximately 18% of surveyed respondents who plan to spend more on socializing and gatherings this year. 

Within this group of optimistic spenders lies an opportunity for CPG companies—of those who plan to spend more on socializing this holiday season, the majority (58%) intend to do so through buying more premium and quality ingredients for at-home entertaining. This includes premium fresh foods, such as high-quality meat or seafood (66%), fresh produce (64%) and a variety of snacks, chocolate, and confections (50%).  

In times like these, it’s important to leverage splurge-worthy categories alongside ideal product pairings to expand the basket of high-spending holiday shoppers. The right analytics can identify unconventional and high-potential category pairings to guide the holiday staples consumers buy and inspire additional items of interest that complement or help complete the occasion.  

Trend 4:

A fierce festive showdown between brands 

Perceptions of private label or store-branded products have warmed over the years, and the value offered has made them an increasingly viable option on the shelf. But it remains to be seen if store brands can maintain momentum during the holidays.  

On the one hand, there are some CPG categories where private label products have a history of comparatively low sales during key holiday moments. For instance, private label share of snacks and candy was 2% lower than the annual average during Easter in the UK.  

On the other hand, recent measures of retail sales and consumer sentiment could indicate private label strength during the upcoming holidays and a fierce battle for consumer interests across all name brand and private label offerings.  

Generally speaking, many global consumers (35%) feel private labels are higher or equal quality compared to name brands, and in the US, 27% of Americans plan to buy more private label as a savings strategy. In fact, US sales measures confirm there’s been a steady upward trend towards overall private label consumption among CPG categories – where share of sales in Q2 2023 was at 19%. At the current trajectory, private label share of sales could reach upwards of 19.6% by the end of the year.    

American consumers report that if prices continue to rise, they expect to buy more private label products in categories like canned foods (34%), paper products (31%), baking products (31%), and dairy products (30%), and globally speaking, consumers feel most confident in the quality of private label food staples (I.e. flour, rice) compared to other private label categories.  

In the road ahead, brands should avoid trying to out-price or over-promote in order to compete. Strive to meaningfully co-exist, through demonstrating unique benefits. Will your product last longer, taste better to guests or provide more servings per unit? Alternatively, highlighting differentiated formulation or packaging are other ways to justify your purchase positioning this holiday season.