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CHICAGO — As inflation pressures linger, Americans are doubling down on Thanksgiving traditions, according to Circana's annual Thanksgiving Outlook report. Despite a modest slowdown in the inflation rate for holiday essentials, prices remain nearly 26% higher than they were in 2020, and yet consumers remain determined to celebrate with all the trimmings.
This year, 79% of consumers say they plan to uphold their Thanksgiving rituals, gathering with family and friends to mark the holiday in customary fashion. In light of the economic landscape, 34% of respondents expect to spend more on groceries, but are reluctant to cut back on their purchases. With Thanksgiving set to drive a projected $2.4 billion in additional sales, manufacturers and retailers have a unique opportunity to connect with budget-conscious shoppers still keen on maintaining festive traditions.
“The resilience of Thanksgiving traditions shows the enduring value of this holiday for American families,” said Joan Driggs, Vice President of Content and Thought Leadership at Circana. “Retailers can tap into this sentiment by offering solutions that blend convenience, value, and a touch of creativity. Whether it's promotions on staple items or new twists on holiday hosting, there's plenty of room for businesses to meet consumer needs.”
Key Consumer Insights:
- Spending Trends: While overall inflation for Thanksgiving staples has eased to a 2% increase this year, shoppers might not feel the difference due to accumulated price hikes over recent years. Nevertheless, 61% of Americans still plan to celebrate the holiday at home, although this represents a slight drop compared to prior years.
- Early Deal Seekers: A significant 38% of consumers are planning to shop early for discounts, with families with young children being the most proactive in hunting for deals. This shift presents a timely opportunity for retailers to roll out early promotions and secure consumer loyalty before the holiday rush.
- Generational Differences in Gatherings: Younger consumers are prioritizing larger gatherings, with Gen Z and young millennials planning Thanksgiving dinners for an average of 10.6 guests. In contrast, older generations are opting for more intimate celebrations, potentially influencing the demand for bulk purchases versus single-serving items.
Retail Opportunities: Circana’s report underscores the importance of the weeks leading up to Thanksgiving, with 82% of the seasonal sales surge occurring in this period. Last year, the "Thanksgiving basket," comprising 31 core categories, was responsible for a substantial sales lift despite making up only 9% of the total sales during those critical weeks. Retailers who focused on promotions saw nearly 50% of basket items sold at discounted prices, although the depth of those discounts aligned with year-round averages.
For 2024, Circana anticipates a continued focus on promotional strategies to attract consumers seeking value without compromising on quality. As home-hosted meals remain the preference for the majority, there's an increasing opportunity for retailers to promote host-friendly products and innovative gifting options to enhance the at-home experience.
“By tailoring merchandising strategies and promotions to align with consumer priorities, brands can play a vital role in helping shoppers navigate the season’s financial challenges,” added Driggs.
Thanksgiving remains the second-largest food-related spending event after Christmas, solidifying its importance for the retail sector. As consumers seek ways to balance tradition with economic reality, brands that prioritize value, convenience, and creativity are likely to emerge as winners in the competitive holiday landscape.
