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

For the holiday season, the front lawn of the Milam family’s house in Dallas has transformed into a mini golf winter wonderland.

Visitors stop by from nearly sunrise to sunset to admire the Christmas decorations — and to borrow a club to play a round of putt-putt themed around Santa, candy canes, snowflakes and more.

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

Decking out the front yard has become an annual tradition for the Milam family since the Covid pandemic. The family of four’s elaborate decorations capture a trend that many retailers, including Home Depot and Walmart, have sought to capitalize on in recent years: some customers are going bigger on seasonal decor, even as they watch how much they spend on other discretionary items.

Consumers are prioritizing decorations and experiences over gifts this holiday season, according to an annual holiday spending survey by consulting firm Deloitte. The survey found that respondents expected to spend a little less on gifts this year – down about 3% year over year. But they planned to spend about 9% more on nongift purchases, with most of that jump coming from holiday decorations.

Survey respondents said they planned to spend $181 on home-related items, furnishings and holiday decorations, up 22% year over year and nearly 60% more than the pre-pandemic 2019 holiday season.

Holiday decor is providing a boost for retailers, even those like Target, Dollar General and Dollar Tree, which have noticed a pullback in other categories.

Target’s chief commercial officer, Rick Gomez, said on an earnings call in late November that customers are “looking for ways to add a little bit of seasonal decor,” which drove higher sales of accessories including frames, candles and vases in the most recent quarter.

Dollar General CEO Todd Vasos said on the company’s earnings call in early December that the retailer was pleased by customers’ response to “the discretionary side of Halloween.” He said shoppers’ reactions to that seasonal decor offered “some glimmers of hope” as the dollar store chain headed into the peak of the holiday season.

Yet holiday decor sales may not look as jolly as some companies wish.

For example, National Tree Co. CEO Chris Butler said sales have been slower in the past two years. He said the New Jersey-based company, which sells online through retailers including Kohl’s, Amazon, Macy’s and Home Depot, expects sales to be flat year over year.

Nearly 70% of the company’s sales typically come from artificial Christmas trees, but it also sells decor like wreaths and garlands, Butler said.

Sales surged in 2020 and 2021 during the pandemic, when consumers had extra stimulus money to spend and more time at home, Butler said. Since then, 2022 and 2023 “have been down years because we’re getting over that the big boom,” he added.

Based on the company’s research, consumers typically get a new artificial tree every five to six years. Pandemic purchasing patterns, and the pressure inflation put on families, stretched that replacement period out longer, he said.

“If you can try and make that tree last one more year, consumers are probably going to do that rather than buy new trees,” Butler said.

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 8-foot Santa and an 8½-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 with 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.

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 6-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.

Wiles 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.

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 8-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.

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 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.”