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Amid the holiday shopping season's frenzied countdown, new data suggests consumers still have some worries about overspending. Consulting giant McKinsey released its latest research from its ConsumerWise unit, noting that, while "consumer confidence held steady" in November, people plan to spend less in general until there's a clearer outlook for the economy and volatile global geopolitics.

While U.S. economic forecasts appear healthy, fears of recession remain high among small business owners and their customers, despite headlines suggesting the economy will manage a soft landing in 2024.

"We still have very high gas prices," a West Virginia woman who identifies as a baby boomer told McKinsey. "We still have very high prices for food and services and just about everything else, and it makes it harder on people who are retired."

Toys was one of the few categories where consumer planned to increase spending. Most other spending will focus on food, gas and other essential items like baby supplies. Spending on "semidiscretionary products," such as beauty products, vitamins and vehicles will likely see a drop based on the survey responses.

Consumers are concerned with stretching the dollars they've got, with more people reporting they used buy now, pay later services than the last quarter, probably because of holiday shopping. The poll showed 26 percent of Gen Zers and 28 percent of millennials had used these services, a much higher rate than 14 percent of Gen Xers and 6 percent of baby boomers who drew out their purchases into multiple installments.

The ongoing rise in many categories' prices made many respondents resigned to paying more for the same amount of goods.

"I don't intend to buy any more than the usual, but with prices continuing to change, I just predict I'll be spending more than I do now," said a male millennial in Kansas. " This is the general way all prices are right now, and I don't expect it to change or get better anytime soon."

But sometimes fiscal caution will be thrown to the wind, particularly among consumers who seek new experiences, rather than hard goods.

Restaurants and businesses catering to Gen Z consumers may get a bump from planned splurges, the report said. A full 63 percent of Gen Z respondents said they planned to do some splurging in the next three months, a much higher rate than the 38 percent of all other age groups planning to live it up a little. Restaurants and food businesses are prospective beneficiaries of Millennials, Gen Xers and Boomers, while many Gen Z consumers plan to treat themselves plan to buy jewelry, clothes, and personal care and beauty products.

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Consumers Plan to Spend Less in 2024, But Will Still Treat Themselves to Certain Things

14 20
20.12.2023

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Amid the holiday shopping season's frenzied countdown, new data suggests consumers still have some worries about overspending. Consulting giant McKinsey released its latest........

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