Holiday Shopping Slows as Costs Rise
NEW YORK – The Ah Louis store in San Luis Obispo,California,transforms into a winter wonderland every holiday season.
Green garlands, giant nutcrackers, balls and bows are placed in early November in the historic downtown building that houses the gift shop. Inside,customers can choose from more than 500 different types of decorations and a variety of holiday gift baskets.
“We really made it a magical place. Whether you come in or not, we want to make sure we’re spreading that Christmas cheer,” says Emily Butler, co-owner of the store.
But Butler says she and her twin sister,her business partner,had to work harder this year to turn curious people into buyers and make a profit. Many of the ornaments and small gifts they sell are made overseas and either didn’t arrive or became more expensive when President Donald Trump imposed unusually high taxes on imported goods, she said.
In response, the sisters focused their selection on more cost-effective items like nutcrackers and gift baskets. They’ve also noticed that customers are spending less,choosing a $100 gift basket rather of the $150 version,or purchasing one ornament rather than several,Butler said.
“we are definitely seeing more careful spending this year,” she said.
Unpredictable tariffs, ongoing inflation, and slow job growth have shaken people’s confidence in the U.S. economy. Most adults in the United States have noticed higher prices for groceries, electricity, and holiday gifts in recent months, according to a December survey by The Associated Press-NORC Center for Public Affairs Research.
A Gallup index measuring Americans’ views on current economic conditions fell to a 17-month low in November. Consumers also showed less interest in spending money on holiday gifts: Their estimated gift budgets dropped $229 between October and November,the largest drop Gallup has recorded at that point in the holiday shopping season. The survey was conducted in November, partially during the government shutdown, which could have affected spending plans.
However, the large increase in consumer prices that many economists predicted due to the Trump management’s tariff policies hasn’t happened. Some products have been affected more than others. Here’s a look at what’s happened to supplies and prices in popular gift categories.
Games and Toys
Games and toys were especially likely to see price increases from tariffs, since most of those sold in the United States are made in China, according to industry trade group The Toy Association. The tariff rate on Chinese goods changed frequently, starting with an additional 10%, peaking at 145%, and ending at 47%.
The uncertainty made it arduous for