U.S. Holiday Spending 2025: Slower Growth, Smarter Shoppers, and a Shift Toward Value

The National Retail Federation (NRF) projects total holiday sales to exceed $1 trillion for the first time, even as analysts from Deloitte and PwC warn that economic headwinds may temper consumers’ willingness to splurge. Together, the forecasts reveal a market in transition—one defined by value-conscious choices, technology-driven discovery, and growing inequality in household spending power.

According to NRF, retail sales for November and December 2025 are expected to rise between 3.7 % and 4.2 %, reaching between $1.01 trillion and $1.02 trillion. That marks the continuation of a 5.3 % compound annual growth rate since 2015 and builds on last year’s $976 billion total. While the headline number signals resilience, the pace is moderating from 2024’s 4.3 % increase. NRF leaders note that U.S. consumers remain financially solid, but are making more deliberate trade-offs: cutting back on nonessentials to preserve budgets for gifts, food, and celebrations.

NRF Chief Economist Mark Mathews points to a still-strong labor market and rising wages, but also highlights the drag from inflation and tariffs, which are raising prices across electronics, apparel, and household staples. Retailers are responding by hiring fewer seasonal workers—between 265,000 and 365,000 compared to 442,000 last year—and by emphasizing promotions earlier in the season. The organization warns that a prolonged federal government shutdown could dampen sentiment further by delaying paychecks and government spending just as the holidays begin.

Value, Convenience, and Technology Redefine the Holiday Experience

Beyond the macroeconomics, the psychology of the 2025 shopper is evolving. Mastercard’s Shopper Snapshot report paints a picture of consumers who are starting earlier, planning smarter, and spending with intent. Six in ten respondents said “value for money” outweighs brand loyalty or product quality, and nearly eight in ten are timing purchases to coincide with major sale days. The traditional Black Friday and Cyber Monday weekends now extend into weeks of pre-holiday discounting, as shoppers use loyalty programs and cash-back rewards to stretch every dollar.

The omnichannel approach continues to dominate. Nearly 90 % of consumers still shop in-store during the holidays, but Gen Z and millennials are blurring the lines between physical and digital browsing. They draw inspiration from window displays and social-media posts alike, often purchasing both new and secondhand gifts in the same basket. About two-thirds of young shoppers say they’ll maintain or increase their resale purchases this year, underscoring how sustainability and thrift are merging into mainstream holiday behavior.

Artificial intelligence is also quietly transforming the gift-buying ritual. Roughly half of Gen Z and millennial consumers now rely on AI tools for personalized product suggestions or price comparisons. Many even say they would let AI handle their entire shopping list if it meant less stress. For retailers, that shift underscores the need to pair algorithmic precision with the human warmth that holiday marketing depends on.

How Much Will Americans Spend?

KPMG’s 2025 holiday spending analysis shows a nuanced picture of consumer outlays across income brackets and spend categories.

Overall, Americans plan to spend slightly more than 2024, with the largest jump among higher-budget shoppers. Consumers expecting to shell out $2,000 or more will increase their spending by 8.1 %, while lower-budget shoppers (under $500) will barely grow at +1 %. Middle-tier households remain stable, posting gains of 2 %–3 %. This concentration of growth at the top end reinforces the idea that affluent consumers are sustaining much of the retail momentum, even as lower-income families tighten belts.

When viewed through an income lens, the divergence becomes clearer. Households earning under $50,000 plan to reduce holiday spending by 1.7 %, whereas those above $200,000** expect to boost it by 9.3 %. The $50K–$99K segment shows healthy 8.7 % growth, suggesting that stable mid-income earners are more confident heading into the season.

Competing Forecasts: Resilient but Slower Growth

While NRF remains optimistic, other research firms paint a more cautious picture. Deloitte expects holiday retail sales to rise only 2.9 %–3.4 %, Bain & Company pegs growth at 4 %, and PwC foresees a 5 % decline in planned household spending—the steepest drop in five years. Consumers are confronting higher credit costs, new tariffs, and persistent price inflation, all of which erode discretionary income.

Even so, digital channels remain a bright spot. Deloitte predicts e-commerce sales will climb 7 %–9 % to exceed $305 billion, driven by mobile commerce, which now accounts for over half of all online holiday purchases. Retailers that emphasize “value with experience”—offering deals without sacrificing customer delight—are poised to outperform. Bain advises stores to balance AI-driven personalization with human service, while eMarketer encourages brands to “lead with utility and reward with emotion.”

The Human Side of Holiday Shopping

Despite the economic uncertainty, shoppers haven’t lost their festive spirit. Mastercard found that nearly half of consumers feel excited about holiday shopping, while PwC notes that many still see it as a form of retail therapy—a chance to preserve normalcy and joy amid inflation fatigue. Self-gifting remains popular, with six in ten buyers admitting they’ll treat themselves while shopping for others.

Ultimately, the 2025 holiday season illustrates an American consumer who is cautious but not defeated. Spending will likely reach historic highs, yet the mindset behind those purchases is shifting toward practicality, digital empowerment, and emotional balance. Retailers who can combine meaningful value, frictionless technology, and human warmth will be best positioned to capture both hearts and wallets as the trillion-dollar milestone arrives.

Sources & References

Forbes. (2025). Holiday Retail Sales 2025: U.S. Shoppers Expected To Pull Back. https://www.forbes.com/sites/sap/2025/11/18/holiday-retail-sales-2025-us-shoppers-expected-to-pull-back/ 

Mastercard. (2025). What are holiday shoppers putting on their lists? Earlier starts and smarter carts. https://www.mastercard.com/global/en/news-and-trends/stories/2025/mastercard-holiday-shopper-snapshot.html 

National Retail Federation. (2025). NRF Expects Holiday Sales to Surpass $1 Trillion for the First Time in 2025. https://nrf.com/media-center/press-releases/nrf-expects-holiday-sales-to-surpass-1-trillion-for-the-first-time-in-2025 

KPMG. (2025). Consumer Pulse Survey. https://kpmg.com/kpmg-us/content/dam/kpmg/pdf/2025/consumer-pulse-holiday-2025-analysis.pdf