American shoppers are telling pollsters they plan to spend less this holiday season, even as the industry’s biggest trade associations predict another year of sales growth. The gap between what consumers say they intend to do and what retail forecasters expect reflects a season shaped as much by inflation as by festive cheer, according to Retail Dive.
Consumers signal a pullback
A PwC survey found that Gen Z consumers plan to cut their holiday spending by nearly a quarter this year. That pullback is significant enough that PwC estimates it could drag overall US holiday spending down by about 5% year over year, which would mark the first such decline since 2020.
Other generations are less pessimistic. Millennials plan to spend about 1% less, while Gen X shoppers expect to spend roughly 2% more and baby boomers around 5% more, according to the same PwC data reported by Retail Dive.
Deloitte’s 2025 Holiday Retail Survey paints a similarly cautious picture, finding that consumers plan to spend an average of $1,595 this season, 10% less than last year, with cuts affecting both gifts and holiday experiences such as travel and dining out. A separate PwC seasonal-spending survey cited by Forbes and SAP found consumers planning to spend 5% less than in 2024, the steepest year-over-year drop in five years.
Trade groups still expect growth
Despite those signals, the National Retail Federation forecasts holiday retail sales will grow 4.2% year over year to roughly $1 trillion. The NRF expects nearly half of that nominal growth to come from factors other than pure volume increases, such as higher prices, and anticipates muted seasonal hiring this year.
The International Council of Shopping Centers (ICSC) is even more bullish, forecasting growth of between 4.3% and 4.9%, which would push holiday sales past $1.7 trillion. Yet an ICSC report also found that nearly half of shoppers are worried about affording holiday gifts, citing concerns about the job market and household debt.
Nearly half of nominal sales growth projected by NRF is expected to come from pricing rather than increased volume.
A ‘less for more’ season
Analysts broadly agree that the apparent contradiction, shrinking spending intentions alongside rising dollar forecasts, reflects a squeezed consumer leaning on discounts rather than disappearing altogether. JPMorgan’s holiday outlook describes spending as likely to hold steady through the fourth quarter despite elevated living costs and the possibility of a recession next year, with e-commerce continuing to take market share from physical stores. JPMorgan notes spending is strongest among higher-income and younger shoppers, a finding that sits uneasily alongside PwC’s identification of Gen Z as the group driving the pullback.
Retailers are responding by discounting earlier and more deeply than in previous years, according to both JPMorgan and real estate firm Avison Young. The pressure is heaviest on smaller, independent retailers, who Retail Dive reports are facing their toughest holiday season in years, squeezed by a federal government shutdown that began on October 1, alongside tariffs and persistent inflation.
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