Retailers have traditionally welcomed the holiday shopping season expecting consumers to open their pocketbooks and spend generously. This holiday shopping season could be different. Journalist Thorvardur de Shong explains. “Holiday shopping typically follows a familiar rhythm: predictable, steady, and rooted in tradition. This year, the melody sounds different. Consumers are approaching the season more like jazz: improvisational, cautious, and defined by new patterns in how people spend, celebrate and search for meaning.”[1]

What Experts are Predicting

Journalists Neil J Kanatt and Anshi Sancheti report that a study from Deloitte concludes, “U.S. holiday sales are projected to grow at their slowest pace since the pandemic … as macroeconomic uncertainties weigh on consumer spending.”[2] They add, “Holiday shopping is a critical sales driver for retailers, especially amid uncertain demand and persistent inflation, compounded by the lingering effects of U.S. President Donald Trump's volatile trade policies.”

PwC also believes this holiday season will make retailers anxious. De Shong reports, “According to PwC’s 2025 Holiday Outlook survey, U.S. consumers expect their average holiday spending to decline by 5% from last year, the first meaningful drop since the pandemic. Gift spending in particular is forecast to decrease by 11%, and Gen Z plans to cut back the sharpest, reducing holiday budgets by 23%. Still, spending remains significant, averaging $1,552 per person, and consumers show no sign of abandoning traditions. Instead, they’re remixing them, with a greater focus on value, food, connection, and experiences.”

Like other experts, McKinsey & Company analysts see changing consumers behavior. McKinsey’s Emily Reasor and Monica Toriello report, “They’re concerned about inflation and looking for value, so US consumers are changing their shopping habits this holiday season.”[3] Reasor notes, “People are planning to spend roughly the same dollar amount as they have in the past — but they’re going to shift their spending toward needed goods as opposed to discretionary goods.”

Bain & Company analysts are bit more sanguine about the upcoming holiday shopping season. Senior partner Aaron Cheris reports, “In its annual US retail holiday forecast, Bain & Company predicts healthy but below-average sales growth this season. The firm forecasts a 4% year-over-year (YoY) increase in retail sales in November and December, reaching more than $975 billion. That compares with a 10-year average of 5.2%, underscoring consumer caution, though rising wages, stock market strength and potential interest rate cuts could help boost holiday sales.”

What Predictions Mean for Retailers

The predicted growth rate for holiday shopping means retailers can expect steady overall sales; however, retailers who deliver a broader sense of value beyond just price reductions are more likely to do better than competitors. That’s because shoppers are focusing on the overall value they receive, including quality, convenience, emotional connection, and trust in a brand.

Many retailers have already made big bets about what consumers want going into this year’s peak selling season. Business journalist Paul Berger explains, “U.S. ports in July and August handled a near-record 2.36 million and 2.28 million import containers, measured in 20-foot equivalent units, according to the NRF’s Global Port Tracker, as retailers rushed to beat tariff deadlines.”[5] Jonathan Gold, NRF’s vice president for supply chain and customs policy, told Berger, “Retailers have stocked up as much as they can ahead of tariff increases, but the uncertainty of U.S. trade policy is making it impossible to make the long-term plans that are critical to future business success.”

Brian McCarthy, Deloitte’s retail strategy leader, observes that this year’s growth rate is more in line with historical holiday growth.[6] It is also likely that retailers will try to hold down price increases until after the holiday shopping season. McCarthy notes, “The thing that we're paying attention to is for how long can brands and retailers absorb some of those increased costs of products before they need to increase the prices?”

Retailers need to pay close attention to shifting tastes and behaviors, especially during the holiday shopping season. Studies are showing that traditions endure; however, they are being “remixed” with a greater emphasis on experiences, connection, food, and gift cards. Retailers focusing on omnichannel activities are likely to achieve the best results. Consumers are expected to shop more in brick-and-mortar stores compared to last year, although e-commerce will still be a significant channel. Although it may be too late to change inventory, a significant number of consumers plan to trade down to smaller pack sizes, different brands, or discount retailers to save money. In addition, retailers should focus on adding value beyond just markdowns by focusing on convenience, personalization, and a positive emotional experience. 

Concluding Thoughts

Most of the studies cited earlier make the point that many consumers began their holiday shopping as early as July. Retailers understand that capturing early holiday shoppers can help build a sales pipeline that can be accelerated later in the season. McCarthy explains, “The reason I think that they're going to continue to spend earlier is less about people trying to spread their budget out further across the year, but more that these value seeking consumers are being much more savvy and thoughtful about when they can get the right product for the right price.”

Cheris predicts, “This holiday season will be a mixed one for US retailers. Consumers are cautious and facing financial pressure, but they are also feeling the lift from higher wages and a strong stock market. Leading retailers will strike the right balance — leaning into value, creating warm human experiences while implementing new technologies, and capitalizing on big events like Black Friday to capture share from competitors.”

Alex Barocas, Shilpa Sharma, and Mrin Nayak, analysts with the Boston Consulting Group, add, “Faced with elevated uncertainty and a projected downtrend in consumer spending, retailers need big, bold ideas to close anticipated revenue gaps in the holiday season. Sustained discipline and cross-functional transparency and collaboration are vital. The same new AI technologies and platforms that are reshaping the holiday shopping experience for consumers can be powerful tools for retailers — and can make the competitive difference when it comes to sparking the right connection with customers. With a mindset oriented toward early action along with a commitment to excellence and agility in execution, retailers can celebrate wins in the months ahead.”[8] A headline from Retail Dive perhaps says it best, “The holidays should be OK for retailers that try hard enough.”

Footnotes

[1] Thorvardur de Shong, “PwC Holiday Outlook 2025: Shoppers cut back,” Mass Market Retailers, 5 September 2025.

[2] Neil J Kanatt and Anshi Sancheti, “US holiday sales set for slowest growth since pandemic, Deloitte report forecasts,” Reuters, 10 September 2025.

[3] Emily Reasor and Monica Toriello, “Holiday shopping 2025: US consumers hunt for early deals,” McKinsey & Company, 8 September 2025.

[4] Aaron Cheris,” US holiday retail sales to reach more than $975B despite below-average growth, Bain & Company estimates,” Bain & Company, 9 September 2025.

[5] Paul Berger, “U.S. Imports Set to Drop as Tariffs Bite,” The Wall Street Journal, 10 September 2025.

[6] Hannah Parker, “Deloitte projects holiday sales will return to pre-pandemic growth,” Quartz, 11 September 2025.

[7] Daphne Howland, “The holidays should be OK for retailers that try hard enough,” Retail Dive, 17 September 2025.

[8] Alex Barocas, Shilpa Sharma, and Mrin Nayak, “How Retailers Can De-Risk the 2025 Holiday Shopping Season,” Boston Consulting Group, 17 September 2025.