Holiday Shopping When Prices Are High

From eggs to fish to fresh fruit, higher-than-average prices in American grocery stores continue to put a strain on household budgets. What’s the root cause of rising prices and what does it all mean for holiday shoppers? Read on for an overview of the current cost situation, plus a few tips on how to shop smart for wintertime festivities in today’s economic environment.

Current Cost Trends

Inflation due to the COVID-19 pandemic has greatly slowed and wages are on the rise—yet prices for many items remain high. According to the Bureau of Labor Statistics, consumer prices have increased around 21.4% since February 2020. In other words, if a family spent $1,000 on groceries four years ago, they would need an additional $214 to buy the same amount of food today.

Indeed, today’s high prices are primarily felt in terms of what happens at the grocery store. Energy and gasoline costs are falling, as is the price of smartphones, TVs and other electronic products. Food prices, however, are still putting a bigger-than-expected dent in shoppers’ budgets: with the price of eggs increasing nearly 40% from September 2023 to September 2024.

One key reason for the price instability of food is lingering effects of the pandemic. Supply chains were disrupted, as was the global labor market. At the same time, experts frequently point out that conglomerate profit margins have soared since the pandemic, indicating that food prices will only fall if more federal regulations are enforced to protect American consumers.

The Impact on Holiday Spending 

Some good news for consumers: holiday staples such as trees, decorations and wrapping paper don’t rank amongst the items experiencing the strongest post-pandemic price increases. Again, it’s primarily grocery items or meals out putting the most pressure on consumer wallets.

Of course, food still plays an important role in most families’ holiday celebrations. From a Thanksgiving turkey with gravy and stuffing, to a sparkling white wine toast on New Year’s Eve, it’s hard to imagine November and December festivities without a run (or five) to the grocery store. That may be why consumers in one retail survey said they were planning to increase their holiday spending by an average of 8% over last year.

How to Spend Less This Season

With many families struggling to stretch their festive budget, retailers are introducing a plethora of seasonal promotions and discounts. Do your research before heading to the mall or grocery store so you know where to shop for the best prices. This might mean forgoing the one-stop-shop and instead hitting a few different stores for various items.

Besides looking for specific discounts, consider visiting reliably cheap grocery stores such as Trader Joe’s or Aldi. While these stores may have less selection than a bigger supermarket, the trade-off for low prices is usually well worth it.

Another strategy is to keep your holiday menus very flexible. Decide on a main dish after seeing what proteins are on sale; skip the cranberry sauce if it’s over budget; make a frozen berry pie instead of fresh if prices are better in the freezer section. Hosts can also reduce their financial expenditure by doing a potluck-style holiday meal. Whatever you do, be wary of planning a dish that involves a lot of eggs: bird flu is the primary culprit behind rising egg prices, which experts suggest could soar again over the holidays.

As for other holiday shopping, head straight to the thrift store. Secondhand stores offer creative gift ideas—how about a set of champagne flutes or a like-new stack of kids’ books?—for a fraction of the price. Indeed, thrift stores tend to be far less expensive than online shopping, plus you never have to budget for shipping costs.

Final Thoughts

Enjoying a merry holiday season doesn’t need to break the bank. It’s all about shopping smart and re-setting expectations. With a little creativity and a commitment to returning to the true meaning of the holidays (quality time with loved ones, not stuff) you’ll be certain to have a festive and memorable celebration.