Christmas trees are getting more expensive as Americans remain homebound

Two consumer trends are buoying demand.

Colavita Christmas Tree Farm never before had someone show up in early November looking to buy a tree for the holidays—until 2020, that is.

“I said, ‘Thanks for the compliment, but that’s not going to last until Christmas,’” said Bob Colavita, 76, who has owned the business outside Philadelphia for 24 years. The customer ended up buying a 6-foot Frasier fir anyway. “She said, ‘I just want something happy in the house.’”

Christmas trees—along with wreaths, lights and other decor—are in high demand this year as many Americans embrace holiday festivity in the face of rising coronavirus cases and bleak predictions for the winter months.

Two consumer trends are buoying demand. U.S. households are sitting on about $1.2 trillion more in savings than usual, and when they’re spending, they’re specifically targeting items to spruce up their homes. The majority of U.S. consumers say they’re more interested in holiday decorations and seasonal items than usual this year because of the pandemic, according to a survey by the National Retail Federation. 

For the tree industry, from the independent growers to the big home-improvement stores that sell them, there’s a lot on the line. Americans bought 26.2 million live trees last year to the tune of about $2 billion, according to the National Christmas Tree Association, a Littleton, Colorado-based trade group whose affiliates produce about three-quarters of the U.S. supply. While the figure was down slightly from 2018 amid growing demand for artificial trees, last year was the “first year in a long time that growers made a reasonable profit,” according to a report from the association.

Americans are also more likely to splurge on their purchase this year, the group said. The median price for real trees sold in 2020 is expected to be about $81, up 7% from last year and 23% from 2018.

Big chains are taking notice, with Lowe’s Cos offering free tree delivery this year for the first time to snag market share. The home-improvement retailer and rival Home Depot are trying to sell more holiday decorations and gifts this season to further capitalize on an already strong year, after the so-called essential retailers remained open throughout the pandemic.

It’s still several weeks until the holiday, but at Colavita Christmas Tree Farm, early indications are good. Last Friday through Sunday, traditionally the sales kickoff, was the farm’s best weekend ever, the owner said. He spotted an unusually large number of young couples, suggesting a new cohort is buying trees after years on the sidelines.

David Engle, who runs Christmas-tree farm Arbutus Glen in Gambier, Ohio, also noticed a majority of his customers were millennials with small children. A handful of the customers he spoke to were converts from artificial trees who wanted to switch things up this year as a way to do something special.

Beyond the decorative aspect, Engle said he believes the experience of buying a real tree—stomping through the mud, smelling the pine needles—offers something many people are craving after months spent mostly in front a computer. At his farm, there’s also an antique tractor customers can ride.

“The young millennial generation wants to go natural,” Engle said. “I think they’re looking for that outdoor experience.”

April Ward, a 38-year-old teacher in Windsor, N.C., just bought her first Christmas tree in four years. The 3-footer, which she picked up for $30, is a way to make the home she shares with her college-aged daughter more festive at the end of a tough year.

“We’ve been spending so much time in the house,” said Ward, who had COVID-19 earlier this year. “We’ve been spending so much time in this state of fear that I wanted to really try to bring the magic of Christmas into my home.”

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