The city was ranked among 264 municipalities throughout the United States according to their average cost of goods such as gifts, decorations, flowers, greeting cards, movie tickets and wine.
NerdWallet.com also worked with Harris Interactive Inc. on a poll of more than 2,000 people between Nov. 3–5 asking respondents how much they plan to spend during the holiday season.
Nationwide the average family of four planned to spend $877.22, according to NerdWallet. But in San Marcos a family of the same size will spend $781.46 on average, the study states.
"At NerdWallet we are always trying to make financial insights as relevant as possible, and that includes making any price data we use reflect where you live," analyst Katie O'Connor said. "Luckily for those in San Marcos, they will spend an average of $524.34 [on gifts] this holiday season, the eighth-cheapest in the nation."
San Marcos was among three Texas cities to be ranked in the Top 10. McAllen and Harlingen were Nos. 1 and 2, respectively.
Brian Bondy, San Marcos Chamber of Commerce president, said he is not surprised the city received the designation considering the strength of the local retail market over the past decade.
He said the growth in sales tax revenue year after year has provided proof of San Marcos' retail health.
"It's logical that we would be an affordable place to shop not only for Christmas but also year-round," he said.
Bondy pointed to the San Marcos Premium Outlets and Tanger Outlets, shopping centers in the city that have several discount retailers as major hubs for shopping activity. He said the shopping centers draw many tourists, especially from Mexico, during the holiday shopping season.
But Bondy said area residents continue to make large contributions to local sales tax revenue as well.
San Marcos is growing as a "destination community," and NerdWallet's study validates that, he said.
"No, we're not going to compete with Austin or San Antonio," he said. "But this town is every bit as strong, if not stronger, than most 50,000-plus communities."
For more information, visit www.nerdwallet.com.