Recession Readiness Insights

How Consumer Financial Stress May Impact Holiday Sales

How Consumer Financial Stress May Impact Holiday Sales

December 07, 2023 | Maria Urtubey

The holiday shopping season is in full swing, but how will consumer financial stress impact holiday spending? In this episode of the Market Pulse podcast, we bring together our panel of experts from the Equifax Risk Advisors Group, including Dave Sojka, Jesse Hardin, Tom O'Neill, and Thomas Aliff to dive into the relationship between economic factors and holiday sales. 

Listen to the full episode now or continue reading highlights from the interview. 


Consumer Stress Persists for Some Consumers

There are several economic uncertainties impacting the consumer shopping experience, said Jesse Hardin. While headline inflation numbers may be falling, the impact on consumer habits and spending behaviors is more nuanced. Factors such as rising prices, job market health, and workforce reductions contribute to the complex landscape often referred to as the K-shaped economy.

“The headline inflation numbers continue to fall. Obviously, that's good,” Harding said. “But really when you question what the benefit is to the consumer, does a 3.7% inflation headline versus 3.2% really change a consumer's habits or perceptions or spending behaviors?”

Hardin attributed a slowdown in spending in the final months of this year to the increased cost of living. But impact varies by age group, with the 30-to-39-year-olds and 40-to-49-year-olds expressing higher levels of worry, he said.

Understanding Consumer Segments is Key

Tom O'Neill underscored the importance of understanding consumer segments based on age, income, family size, and other characteristics. He pointed out the diverse impact of economic trends on different populations, emphasizing the need for retailers to tailor their strategies accordingly.

“We hear from a lot of major retailers that they're taking consumer stress into account. A lot of them are focusing on value shopping and acknowledging that times are tight for consumers in their marketing and pricing strategies,” O’Neill said.

One trend the financial industry can count on is the increased use of revolving debt. 

“As we're going into this holiday season, the one thing that does seem certain is that credit usage is going to continue to increase,” he said.

Consider the International Perspective

Inflation is impacting consumers across different global regions, with interest rates and credit demand responding accordingly. Thomas Aliff emphasized the need to consider these international trends when assessing the economic landscape.

“A lot of the same trends that we're observing in the U.S. do happen elsewhere, but they're happening at different rates,” he said. 

Financial Options for Consumers

There has been a shift in consumer behavior, with a decrease in the use of traditional credit options and an increase in interest in Buy Now, Pay Later (BNPL) services. Dave Sojka said BNPL has evolved from a discretionary spending tool to a vital budget management resource, especially for those experiencing economic challenges. 

“As an alternative or an augmentation to traditional credit cards or private label cards when holiday shopping, BNPL is here to stay,” he said.


Economic stress may force shoppers to reprioritize spending this year in the US, cutting back on discretionary spending, and shifting from higher ticket items and luxury purchases to more essential-focused and experiential spends.

Federal student loans will be in the mix and for some households that means being more strategic in credit usage and looking for promotions, discounts, and budget-friendly options. 

If you have questions or suggestions for future podcasts, feel free to reach out to us at From all of us at the Market Pulse podcast, happy holidays!

Maria Urtubey

Maria Urtubey

Risk Advisor

Maria joined Equifax on May, 2022, but has more than 20 years of experience supporting global companies in pioneering AI, analytics and data consultancy engagements. She has worked closely with financial institutions of all sizes, including start-ups as well as the major players in the Americas, Europe and Asia Pacific[...]