Here's where that money is going, according to data from the National Retail Federation.
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From giving presents and hanging decorations to baking cookies and planning the perfect dinner menu, the holiday season is a time filled with loved ones and tradition. However, all of the factors that go into planning a festive celebration can be expensive. A new report by the National Retail Federation reveals that consumers who observe a winter holiday plan to spend an average of $998 on items such as gifts, food, decorations, and other holiday-related purchases for themselves and their friends and family. 

The spending report is based on data from several surveys conducted from October through December that were fielded to over 5,000 consumers each month. Researchers found that consumers plan to spend roughly the same amount of money this holiday season as they did in 2020. According to the report, planned holiday spending breaks down to $648 on gifts for family, friends, and co-workers, while $231 is spent on non-gift holiday items such as food and decorations, and $118 goes to miscellaneous holiday purchases for themselves or their loved ones. 

happy young family out holiday gift shopping
Credit: svetikd / Getty Images

A majority (57 percent) of holiday spending will be done online, while 47 percent plan to shop at department stores. According to the NRF, online and other non-store sales are expected to increase from 11 to 15 percent this year compared to 2020. As for the gifts consumers are interested in receiving, a large chunk (56 percent) are hoping for gift cards. The NRF's report reveals that an average of $28.1 billion will be spent on gift cards this year, with consumers buying roughly 3.4 gift cards each. Other popular gifts include clothing and accessories (47 percent), electronics (26 percent), and home décor (23 percent). 

Although this was a huge year for early holiday shopping—61 percent of consumers started in November—some still plan to make purchases during the week of December 25. Of the people who plan to do so, 41 percent say it's to take advantage of holiday sales and promotions, 23 percent want to use up gift cards, 15 percent plan to return or exchange unwanted gifts, and 11 percent will shop as a social activity with loved ones

While the NRF's report provides a glimpse into what holiday shoppers plan to spend, Investopedia notes that Americans' actual spending has increased each year since 2010, a trend that's expected to continue in 2021. According to their breakdown of the report, overall holiday spending is expected to go up as much as 10.5 percent this year, noting that this will be the largest single-year increase since at least 2002. The company attributes the large jump to this year's higher-than-normal inflation rate.

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