Cheer Up! Inflation is cooling and so are prices on select holiday staples. While Bankrate’s 2023 annual look at the price of holiday essentials shows that 65% of items are more expensive than a year ago, 35% of items are down from the prior year.
Bankrate looks every year at 40 items common to the holiday season (within the Bureau of Labor Statistics’ consumer price index (CPI)) to see if the price has risen or dropped from a year ago. This year, essentials like electronics, smart phones and the price of air travel dropped, while the cost of food and entertainment, such as concerts and sporting events, rose.
In 2023, 65% of holiday essentials are more expensive than they were a year ago, however, that marks an improvement from the previous year, in which 90% of essentials were more expensive. While inflation is still a presence, it's less of a Grinch this year. In fact, just two of the 40 holiday staples rose by double-digits, compared with 14 items that surged by 10% or more last year.
The Bankrate analysis looked at 40 essential items to the holiday season in four categories: experiences, gifts, entertainment and travel.
Entertainment
- Five of the top ten most inflated items this year still belong to the entertaining and food categories, including eggs (+49.1%), sugar and sweets (+5.4%), turkey (+5%), bakery products (+4.1%), and meats (+3.6%).
- Christmas trees are down (-2%). Utility costs are up (+.02%), but only a little, as are housekeeping supplies (+3.1%), and household equipment and furnishings.
Gifts
- Of the 35% of items that are less expensive this year compared to 2022, 50% belong to the gift category, and include smartphones (-14%), televisions (-9.5%), computers and home assistant devices (-4.6%), toys, games, hobbies and playground equipment (-4%).
- The prices of wrapping and delivering gifts are slightly up from last year (+2.3% and +1% respectively).
- Tools, hardware, outdoor equipment and supplies, and cosmetics are also up, but only barely (+2.8%).
Travel
- The cost of gasoline and airfares are lower this year (-8.9% and -12.1%, respectively) than in 2022. Transportation services are more expensive (+10.1%). Airline fares are also lower (-6.8%) than before the pandemic, while gasoline prices have risen (+30.4%) since February 2020.
Experiences
- Four of the ten most inflated items belong to the experiences category, including admission to sporting events (+16.4%), movies, concerts, and theater tickets (+4.4%), restaurant meals (+4.4%), and alcoholic beverages away from home (+5.2%).
Essentials still higher than pre-pandemic levels
About 90% of holiday staples are more expensive today than in February 2020. That means it now costs an average of $121 to buy the same holiday goods and services that would have cost $100 before the pandemic. That may not sound like much, but it can add up quickly.
Especially when you consider that the holidays are the time of year when many consumers spend most. Between Nov.1-27, deal-hunting shoppers dished out a whopping $109.3 billion and Americans spent $12.4 billion on Cyber Monday alone, data from Adobe Analytics shows.
“The difficulty is, these holiday events are significant for people, and as important as it is to save money and to live within our means, it’s really important we have these connecting moments,” says Nate Astle, certified financial therapist and consultant for Beyond Finance, as reported by Bankrate. “You can have connecting moments without breaking the bank.”
There are things you can do to help make the season a bit brighter.
- Set a budget for spending and stick to it.
- Ask for lists from gift recipients so you can buy things they want or need
- Use miles or points for travel and hotel stays
- Instead of gifts, host a party
- Track your purchases so you know where you stand
- Take advantage of sales
- Make DIY presents
- Start saving now for next year
