Consumers Expect High Prices and Economic Weakness
A Deloitte survey reveals U.S. consumers anticipate rising costs and a faltering economy, resulting in reduced holiday spending plans.
57% expect weaker economy ahead
77% foresee higher holiday prices
Average spending planned is $1,595
Gen Z plans to spend 34% less
10% drop from last year's spending plans
Value-seeking behaviors increasing among consumers
As the 2025 holiday shopping season unfolds, U.S. consumers report deep concerns over the economic outlook and rising prices, leading to significant cuts in planned spending. This article examines survey data from Deloitte, PwC and other industry reports to detail how households will adjust budgets, where they expect price pressures, and what these trends mean for retailers.
Economic Confidence at Four-Decade Low
A Deloitte survey of 4 270 U.S. adults conducted in late August finds that 57 percent anticipate a weaker economy over the next year—the lowest sentiment since tracking began in 1997. Rising interest rates and persistent inflation on essentials weigh heavily on consumers’ outlook.[1][2]
Widespread Expectation of Price Increases
Most shoppers (77 percent) expect holiday prices to climb this season, driven by recent tariff increases on imports and ongoing supply-chain bottlenecks. Consumers plan to advance purchases into early deals to hedge against further cost hikes.[2][3]
Overall Holiday Spending to Decline
Households project average holiday spending of USD 1 595, a 10 percent drop from USD 1 778 last year. Cuts span gifts, travel and entertainment. All income brackets report reduced budgets.[4][2]
Generational Spending Shifts
Generation
Age Range
Change in Spending
Source
Generation Z
18–28
−34 percent
[2][5]
Millennials
29–44
−13 percent
[2]
Generation X
45–60
+3 percent
[2]
Baby Boomers
61+
−6 percent
[2]
Generation Z’s sharp pullback reflects early-career income uncertainty and higher inflation on housing and groceries. PwC finds Gen Z plans to spend 23 percent less, contributing to a 5 percent overall decline in average holiday budgets to USD 1 552.[6][7][5][8]
Value-Seeking Behaviors
Seventy percent of consumers intend to pursue three or more deal-seeking actions this season. Popular tactics include:[4]
Shopping private-label or lower-cost retailers.
Using coupons and loyalty rewards.
Cooking more at home and reusing décor.
Redeeming points and waiting for promotions.
Non-Gift Versus Gift Spending
Non-gift expenses (hosting, decor, clothing): expected to fall 22 percent, from USD 507 to USD 397 per household.[4]
Gift spending: consumers plan eight gifts on average (down from nine) and a 6 percent spending cut to USD 505.[4]
Third-Party Forecasts
Bain & Company projects overall holiday retail sales growth of 4 percent, below the 10-year average of 5.2 percent.[9]
Adobe Analytics expects online holiday sales to reach USD 253.4 billion, up 5.3 percent year-over-year, with Cyber Week accounting for 17.2 percent of total online spend.[10][11][12]
Reuters confirms online growth slowing to 5.3 percent from 8.7 percent last year amid economic uncertainty.[13]
PwC reports an overall 5 percent cut in holiday budgets and highlights that boomers plan to increase spending by 5 percent, while millennials remain flat year-over-year.[7][14][6]
Implications for Retailers
Cautious consumers signal a season where value, transparency, and flexible experiences will drive competitive advantage. Retailers should emphasize clear pricing, tailored promotions and seamless omnichannel integration to capture share in a constrained market.
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