October 1 kicks off the last fiscal quarter of the year, which includes the biggest retail spending period as well – the holiday shopping season.
With the federal rate hike recently increased, how might consumer spending shift as the holiday shopping season gets closer?
Shelley Kohan
Syracuse University Whitman School faculty member and retail expert Shelley Kohan expects the rate hike to impact holiday shopping, especially those shoppers that are more reliant on credit cards. Kohan is a highly accomplished and driven senior retail executive and consultant with more than 25 years of success in the retail industry. She is available for interviews and her comments below can be quoted directly.
Kohan says:
“For most of 2022, demand has remained strong for consumer goods with the total fiscal retail sales up 9.9% through August. While higher prices are part of the sales increase, the rate of increased sales is higher than that of inflation. Simply put, consumers are still sending money.
“The most recent rate hike may have an impact on holiday shopping. Theoretically, higher interest rates will slow down consumer spending, lessening the demand for goods and services. Less demand means greater supply and would lead to lower prices. This may directly impact retailers discounting holiday goods earlier and taking deeper markdowns to ensure inventory is being sold. There is definitely a tricky balance in finding market equilibrium.
“The higher interest rates will more deeply impact consumers that are reliant on credit cards to make purchases (and don’t pay them off) or have secured a variable mortgage rate. The higher interest rate will impact the disposable income of these consumers, especially in discretionary categories. Rising interest rates can also lead to a recession which results in workers losing jobs and less income.
“Holiday spending will also be negatively impacted by consumers spending less than last year, higher home heating costs, and possible recession. Holiday sales last year were up 14.1% and while no formal forecasts have been made, the increase this year will not be as robust.”
To request interviews or get more information:
Daryl Lovell
Associate Director of Media Relations
Division of Communications
M 315.380.0206
dalovell@syr.edu | @DarylLovell
news.syr.edu | syracuse.edu
Syracuse University
