Deepening divide in U.S. holiday spending trends driven by high prices

An expected uptick in holiday spending in the United States will likely be fueled by households earning over $100,000 annually, while lower-income Americans faced tighter budgets due to rising costs for essentials like groceries and childcare, The Wall Street Journal reported on Thursday. 

"We started to notice this trend where there was a real bifurcation in the market between the 50,000 dollars-and-below consumer in the U.S. market and the 100,000 dollars-and-above consumer," Chris Peterson, chief executive of Newell Brands, which makes Sharpie pens, Graco strollers and Oster kitchen appliances, told the newspaper.

In 2023, the average annual income for an individual worker in the U.S. was $65,470, while the median annual wage for all U.S. workers was $48,060, according to the Bureau of Labor Statistics of the U.S..

Peterson explained that the company is seeing stronger demand for premium products, such as blenders priced at $100 or more, while interest in entry-level options under $20 continues to decline. As a result, Newell Brands is scaling back on improving its cheapest products and focusing on enhancing its high-end offerings for consumers willing to spend more. 

Overall, U.S. consumers spent 3.8 percent more between November 1 and December 24 compared to the same period last year, according to Mastercard SpendingPulse, which excludes auto sales. These figures do not account for the post-Christmas shopping period, a critical time for retailers.