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 U S season unfolds, U S consumers cut spending amid rising prices and deep concerns over the economic outlook U s consumers cut spending price increases across gifts, travel, and entertainment, reflecting caution in response to inflation and interest rate pressures.
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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