Friday, December 20

From trees to decorative chickens, holiday decor could boost retailers as shoppers pull back on gifts

The front lawn of the Milam family’s Dallas home has been turned into a miniature golf winter paradise for the holidays.

The Christmas decorations are on display from almost sunrise to sunset, and visitors can rent a club to play a game of putt-putt with themes like Santa, candy canes, snowflakes, and more.

Firefighter and father of two Mike Milam stated, “You can see not just the excitement and wonderment of kids but also of adults.”

Since the Covid epidemic, the Milam family has made decking out the front yard an annual ritual. The ornate decorations of the family of four reflect a trend that several shops, such as Home Depot and Walmart, have attempted to follow in recent years: Even while they keep an eye on their spending on other luxuries, some consumers are increasing their purchases of seasonal décor.

This Christmas season, consumers are choosing experiences and decorations above presents, according to a yearly survey on holiday spending conducted by consulting company Deloitte. According to the study, participants anticipated spending roughly 3% less on gifts this year than they did the previous year. However, they anticipated spending an additional 9% on non-gift goods, with holiday decorations accounting for the majority of that increase.

Almost 60% more than they spent during the pre-pandemic 2019 holiday season, survey participants stated they intended to spend $181 on furniture, home-related items, and holiday decorations, a 22% increase from the previous year.

Even businesses like Target, Dollar General, and Dollar Tree, who have seen a decline in other categories, are benefiting from the holiday décor.

During an earnings call in late November, Target’s Chief Commercial Officer Rick Gomez stated that the company’s latest quarter saw higher sales of accessories like frames, candles, and vases because shoppers are seeking for ways to add a little bit of seasonal decor.

Todd Vasos, the CEO of Dollar General, expressed his satisfaction with the retailer’s response to the optional aspect of Halloween during the company’s earnings call in early December. As the chain of dollar stores entered the height of the holiday season, he claimed that the responses of customers to the seasonal décor gave them some hope.

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Decor may not save the holidays

However, sales of holiday décor might not appear as festive as some businesses would like.

Chris Butler, the CEO of National Tree Company, for instance, stated that sales have decreased over the last two years. According to him, the New Jersey-based business, which sells online through stores like Amazon, Macy’s, Home Depot, and Kohl’s, anticipates flat revenues in the coming year.

Artificial Christmas trees usually account for around 70% of the company’s revenue, but it also offers garlands and wreaths, according to Butler.

According to Butler, during the epidemic in 2020 and 2021, when customers had more time at home and more stimulus money to spend, sales increased dramatically. He noted that since then, 2022 and 2023 have been slow years as we’re recovering from the significant surge.

Customers usually receive a new fake tree every five to six years, according to the company’s study. According to him, the replacement time was prolonged by pandemic purchasing patterns and the strain inflation had on households.

According to Butler, customers are likely to try to extend the life of that tree by one year rather than purchasing new ones.

Home Depot, a longtime seller of both real and artificial Christmas trees, has leaned more into seasonal decor especially after its 12-foot skeleton, Skelly, became a viral sensation during the pandemic. It s selling an eight-foot Santa and an eight-and-a-half-foot reindeer this year, along with a wide range of other decor like animatronic Disney characters.

Yet the home improvement retailer struck a balance to attract customers looking to spend less for holiday cheer after the run of high inflation, said Lance Allen, senior merchant of decorative holiday for the home improvement retailer. He said it bought more low-priced artificial Christmas trees, such as a prelit tree that sells for $49, this holiday season compared to past ones.

He added its porch greeters plastic figurines like a little snowman or a golden doodle in a Santa hat are also a more wallet-friendly pick at under $40.

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Target s leaders have stressed value, too, as they try to win over consumers who are more discerning in spending on wants rather than needs. The big-box retailer is also tapping into trends, such as pink Christmas decor, mini figurines for mantel landscapes, oversized bows for entryways and walls and nostalgic ceramic ornaments, spokesperson Brian Harper-Tibaldo said.

And to drive sales, Walmart has chased social media-fueled trends while trying to offer value. It debuted a six-foot tall white nutcracker after it noticed that customers were buying its painted large nutcrackers and redecorating them.

The nutcrackers sold out when they first went on sale last year, said Sheila Wiles, lead merchant for holiday decor at Walmart U.S. Walmart doubled its inventory of them this year, but they still were nearly sold out before Halloween, she said.

She said low-priced decor has also been a hit, with customers making their own garlands out of $1.98 red velvet bows and decorating their Christmas trees with 98 cent artificial icicles instead of ornaments.

Home Depot, Target and Walmart declined to share sales figures for holiday decor this season, or say if the category is performing better than last year

Maximizing decor

Though the Milam family created a holiday spectacle, it also wanted to find value along the way.

Instead of buying a lot of decor, the Milam family made most of it. The family spent about $1,000 on its front yard decorations to make the mini golf course, Mike Milam said. Most supplies came from Home Depot, where he bought lumber, paint and other tools. The family of four Mike; his wife Katie; 12-year-old daughter Merrick; and 10-year-old son Nash built the putt-putt holes together on nights and weekends starting in the fall.

This year, the family also bought an eight-foot real Christmas tree from Home Depot for $129 and a festive, plastic Christmas chicken for $20 on Amazon.

But most of the Milams decor is recycled from past years, Mike Milam said. In his neighborhood, he said most families have put up the same decorations and inflatables in the yard as last year.

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Mike Milam said he was more conscientious about spending this year. Food and electricity cost more than they used to. Plus, as his kids get older, they have more sports activities that come with a price tag.

Everything is a little more expensive, he said.

Despite the expense of decorating, he plans to continue decking out his property and has plenty of other ideas in mind for the front yard. So far, the family has filled out out the front yard with themes including Nintendo s Super Mario and a Christmas spin on Steven Spielberg s classic movie E.T. the Extra-Terrestrial.

As he s spent more money and time on holiday decorations, he s cut back on spending on gifts for his kids.

I d rather have experiences than stuff, he said.

Through the projects, he said his children have become handier by learning how to paint, lay AstroTurf and use an electric saw. It s become a way for the whole family to get creative and bond.

We have probably 12 to 15 years worth of ideas, he said. I ll do it as long as I work and my kids are around and want to be part of it.

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