More Americans won’t be buying holiday gifts this year

Code Tenderloin, a nonprofit group serving the homeless in San Francisco, said it has about $7,000 worth of gift cards to hand out to those who need the extra financial assistance over the holidays.

In recent weeks, requests from members of the community have poured in for food, clothing and gifts. Others are merely seeking Code Tenderloin’s help to put a roof over their heads on a rainy evening. And those solicitations will likely only mount as the holiday season drags on, said Donna Hilliard, executive director at Code Tenderloin.

“While everybody is going through their day-to-day, super excited about this holiday season, we have a whole community of folks who are stressed out,” said Hilliard in a phone interview. “We’re seeing more demand this year than we’ve ever seen.”

The dynamic that Code Tenderloin witnesses playing out in San Francisco speaks to a bigger wealth gap that has only accelerated during the Covid-19 pandemic and will be especially evident over the holiday season. Predictions for holiday sales are rosy, with the National Retail Federation, the industry’s biggest trade group, calling for historic gains of 8.5% to 10.5% from year-ago levels. But the growth is largely being driven by a wealthy fraction of consumers. Meanwhile, a record-high amount of people aren’t expecting to partake in any gifting, according to one survey.

The rising prices for fuel, grocery items and other goods are weighing on many shoppers’ minds. Consumer confidence hit a 10-year low in November, according to the University of Michigan Consumer Sentiment Index, as inflation climbed to the highest levels since the early 1990s. Shoppers are spending, but they’re increasingly nervous about opening their wallets.

“The people who had already been struggling before the pandemic right are really struggling now,” said Hilliard. “And everyone that has spent their stimulus are coming in now. Now that the rent moratorium is gone, folks are freaking out.”

This holiday, 11.5% of people plan to sit out the season by not spending anything on presents, gift cards or other items for entertaining, according to a survey by Deloitte. That’s a record amount of Americans on the sidelines, for as long as the consulting firm has been keeping track.

Deloitte found high-income households will spend five-times that of lower-income households this holiday season. The consulting firm polled 4,315 consumers about their holiday shopping plans between Sept. 7 and Sept. 14.

“This tale of two holidays is a pretty good reflection of the tale of two pandemics, right?,” said Stephen Rogers, executive director of Deloitte’s consumer industry division. “What starts off as a health crisis turns into a financial crisis if you’re in the lower-income [bracket].”

“Those of us who have investments…