Supporters of President-elect Donald Trump are poised to spend more this Black Friday while Kamala Harris voters might pull their budgets back, experts told CNBC.
Overall, consumers tend to spend more when they’re feeling better about the economy, which means Trump’s victory could be a boon for holiday spending in many parts of the country and a drag in others.
In the aftermath of the 2024 election, shipping volumes surged in many red states and fell in most blue states.
BATTLE CREEK, MICHIGAN – DECEMBER 18: A hat tops off a Christmas tree at a “Merry Christmas” rally hosted by U.S. President Donald Trump at the Kellogg Arena on December 18, 2019 in Battle Creek, Michigan. The House of Representatives will vote later today to determine if Trump will become the third president in U.S. history to be impeached. (Photo by Scott Olson/Getty Images)
Scott Olson | Getty Images News | Getty Images
Black Friday is poised to take on a new tint of red, white and blue this year after an election that many say was won and lost on consumer sentiment and the economy.
CNBC analyzed shipping trends in red and blue states and spoke with shoppers in Texas, Michigan, New Jersey, New York, Connecticut, North Carolina and Virginia to better understand how the 2024 presidential election results could influence the holiday shopping season.
People who voted for President-elect Donald Trump were overwhelmingly positive about the future of the economy, while supporters of Vice President Kamala Harris were more pessimistic, concerned that the incoming president’s policies could make things harder on the middle class. In a world where sentiment drives purchasing decisions, these differences in opinion could shape how much people end up spending this holiday season.
For example, Harris voter Amanda Davila, a 30-year-old New York City educator, told CNBC she’s planning to spend less on the holidays this year and is “trying to be more cautious” about spending in the leadup to Trump taking office in January.
“I’m worried about my own student loans and whether things will be taken out of forbearance, how much I’m going to be owing if the SAVE Plan [for student loan repayment] goes away and things like that,” said Davila. “It’s very hard being a millennial and having to worry about buying a house, affording groceries, rent, all that stuff. With our income, it’s not enough for everything these days.”
Meanwhile, Trump voter Armando Duarte, a 62-year-old retired utility worker from Fort Lee, New Jersey, told CNBC he’s feeling a lot better about the holiday shopping season after Trump won.
“I’m optimistic that people are gonna feel a little bit more encouraged to spend because they may feel that the economy might be on the mend and coming back,” said Duarte. “I think things are going to really pick up for the better … I think that inflation is going to come down. Jobs are good, but they’re going to get a lot better, and hopefully wages are going to go up, and people are going to be able to afford to just basically live.”
In the months before the 2024 election, retailers fretted over whether it would hurt sales and the all-important holiday shopping season, which was already facing a bleak outlook due to the shortened time between Thanksgiving and Christmas, among other challenges. Many companies issued cautious guidance for the back half of the year in part over concerns that the election would distract consumers from shopping or a drawn out certification process would lead to unrest and dampen sales.
However, now that Trump has decisively won the popular vote, it appears the election could boost sales — at least in many parts of the country — because his supporters largely believe that economic conditions will improve under his direction. If most Americans are feeling better about the economy, it means they’ll likely spend more, too, experts said.
“If they feel optimistic about what comes ahead, then they are willing to spend more, even if it is on a credit card, knowing or expecting that they’re going to have the money to then pay it off,” said Meir Statman, an expert in behavioral finance and a professor at Santa Clara University’s Leavey School of Business. “So the general optimism of Republicans, on the whole, is likely to affect their spending. We know that sentiment generally affects what people do, including spending, and conversely, it might depress, of course, the sentiment of Democrats, and in all likelihood, negatively affect their spending.”
The way some Americans were shopping online in the aftermath of the election bolsters that argument.
Shipping data gathered by e-commerce logistics provider Grip, which ships billions in merchandise across the country every year and specializes in the delivery of perishable goods, shows different shipping patterns in blue and red states. The firm examined the total number of packages it sent in the two months before the election and what percentage went to each state, and how that changed in the two weeks after the election.
In GOP-won states, shipping volumes increased by 50.4% after the election, while Democrat-won states saw volumes decrease by an average of 11.2%. Only two blue states — Illinois and Minnesota — saw shipping volumes increase after the election, while all others saw rates fall.
“Our data shows how major events like elections can significantly impact consumer sentiment, driving changes in eCommerce shopping behavior and logistics patterns,” Grip’s CEO Juan Meisel told CNBC. “After this year’s election, we saw significant shifts in spending activity, with some regions experiencing increased volumes as consumer confidence surged, while others saw declines.”
In a national consumer survey taken after the election, GlobalData found 51.3% of respondents believe a Trump presidency will positively affect the economy, while 13.5% plan to spend more this season now that he’s been elected. Conversely, 7.2% said they plan to spend less.
In another survey conducted by retail analytics firm First Insight, a third of consumers said they are planning to reduce their holiday spending budgets because of the election.
“Consumers have mixed feelings about the election result. However, on balance, there are more who see it as positive for the economy than those who see it as negative,” said GlobalData managing director and retail analyst Neil Saunders. “If people feel good, they are more likely to spend a little more over the holidays. Trump may not have had a huge impact on Christmas, but as far as spending is concerned, he is more of a Santa-like figure than a Grinch.”
Can Trump save Christmas?
In the leadup to the holiday shopping season, sales projections from the National Retail Federation and various consulting firms fell a bit flat after several years of strong growth, buoyed by inflation and pandemic stimulus checks.
In the 10 years before the pandemic and after the Great Recession, holiday retail sales grew on average by 3.68% each year. In some ways, this year’s forecast is a return to that historical average.
The NRF said it expects winter holiday spending in November and December to grow between 2.5% and 3.5%. At the high end, that’s close to the pre-pandemic, 10-year average, but on the low-end, it’s 32% lower than the historical average.
Either way you slice it, the forecast would represent the slowest growth since 2018, when holiday retail sales grew 1.8% from the year-ago period.
“I think we’re gonna have a tough Christmas this year,” said Isaac Krakovsky, the consulting retail leader for EY Americas. “All my clients, big clients, are telling me they’re spending less in capex. All of them, right? When it’s every single one of them, and it’s driven by what they’re seeing in the market, that leads me to think we’re gonna have a tough holiday season.”
A man dressed as Santa Claus holds up a sign as he arrives at former US resident and 2024 presidential hopeful Donald Trump’s a campaign event in Waterloo, Iowa, on December 19, 2023.
Kamil Krzaczynski | Afp | Getty Images
Most holiday forecasts came out before the election so they had not factored in any effects from Trump’s win. But most experts agree that a decisive victory is good for business one way or the other.
“The good news is, certainty is better than uncertainty, even if your person didn’t win … So I suppose that will help,” said Aaron Cheris, a partner with consulting firm Bain & Company. “Usually, in election years, you see a little bit of back loading where people maybe didn’t do stuff earlier because they were waiting to see what happened, and so will you see a little of that at the margin? Probably.”
While many Americans appear to be feeling better about the economy in the aftermath of Trump’s election, inflation pain lingers and is expected to dampen holiday spending. Plus, some categories are expected to outperform others, which could create another winners and losers situation for retailers come January.
Holiday sales for furniture and home furnishings are expected to decline in the high single digits, electronics and appliances are forecast to be flat while apparel and grocery are expected to grow in the low single digits, according to Bain’s forecast. Those differences across categories came out earlier this week when companies like Abercrombie & Fitch and Best Buy reported earnings. Abercrombie issued robust holidy guidance ahead of expectations while Best Buy fell short, warning demand for consumer electronics was waning.
The retail sales forecasts gets a bit murkier, and a bit worse, when inflation is taken into consideration. The NRF’s forecast isn’t adjusted for inflation, nor are Bain and EY’s outlooks of 3% growth. When higher prices are stripped out of the guidance, real growth is expected to land around 0.5%, Krakovsky estimated. Cheris agreed that real growth should be much lower after inflation is taken into consideration.
“It’s not negative, it’s not recessionary, but it’s not exciting,” said Cheris.
Between 2010 and 2019, holiday retail sales grew on average by 4.41% when adjusted for inflation, according to an analysis of data published by Bain. If real sales only grow between 0.5% and 1% this holiday season, it would be a major drop from the pre-pandemic historical average.
Shoppers browse for dresses during the Black Friday sale at the Vivo Activewear women’s clothing store in downtown Nairobi, Kenya November 24, 2023.
Thomas Mukoya | Reuters
Overall, inflation has been propping up retail sales for the last few years, and many of the shoppers interviewed by CNBC lamented the impact of higher prices, regardless of their political affiliation. Some said they plan to spend more this year, but that’s only because prices are higher – not because they’re buying more things.
For Meri Pitts, a 24-year-old college student in Detroit who works in customer care, higher prices have made the holiday season feel more like a chore than something to look forward to.
“I am the type of person, even if it’s not the holiday time, I love to go shopping. I love to, like, get my friends little gifts and things like that,” said Pitts. “Prices have skyrocketed so much that a pastime of mine that I’ve literally been enjoying since I was in high school … it’s just not as fun as it used to be because now I’m more worried about breaking my bank than I am about like getting people gifts that I feel like they deserve.”
— Additional reporting by CNBC’s Michael Wayland, Melissa Repko, Sarah Whitten and Kristian Burt More
