Spoiler alert - US consumers are entering Holiday 2025 with tighter wallets and are prioritizing essentials over luxury.
According to our latest US survey of 400 respondents about their plans to spend this season, 86% say the cost of living will influence their holiday shopping - 64% extremely/significantly - and 3 in 4 plan to cut back compared to last year. With a keen eye on essentials like groceries and apparel, discretionary categories like luxury, health & beauty and home goods are the first to get tossed from Santa’s sleigh.
The broader macro backdrop supports this caution: According to the Bureau of Labor, inflation has re-accelerated at the headline level (CPI up 2.9% YoY in August; food +3.2%, core +3.1%), and consumer sentiment slid again in September to 55.1, its lowest since spring. Forecasts expect modest retail growth (~3%), with shoppers trading down, stretching baskets with promotions, and timing purchases to major deal days.
Meanwhile, e-commerce momentum remains powerful: last holiday set a record $241.4B online (+8.7% YoY), with mobile >54% of transactions and Buy Now Pay Later hitting an all-time high ($18.2B)—signals that digital convenience and alternative tender will again shape peaks like Black Friday and Cyber Monday. Source Adobe Newsroom
The survey data is clear: three out of four shoppers (75%) plan to cut back compared to last year’s holiday spending, and only 4.5% expect to spend more. When it comes how much they plan to spend this year, most stated that $250–$749 was their goal – and yet a striking 18% still plan to spend $1,000+, highlighting a polarized marketplace of value-driven and premium consumers.
External data reinforces this state of cautious consumption. U.S. inflation ticked up again in August, with the Consumer Price Index rising 2.9% year-over-year and food prices up 3.2%. Meanwhile, the University of Michigan’s Consumer Sentiment Index dropped to 55.1 in September, down 21% from a year earlier. Taking a more optimistic view, Deloitte forecasts holiday retail sales to grow just 2.9–3.4%, compared to 4.2% actual growth for holiday 2024 with e-commerce expected to grow at a healthy pace of 7%-9% year-over-year.
Survey respondents are planning to prioritize essentials doubling down in core categories like groceries (74%), apparel (71%), packaged foods (60%), toys (56%), and electronics (57%). At the same time, they expect to cut costs in discretionary categories like electronics (44%), luxury goods (40%), apparel (39%), and home décor (38%).
According to Mastercard, when it comes to electronics AI tech-powered health and wellness equipment will be flexing this season: Spending on new fitness brands grew at 30% year over year from 2023-2024 as compared to 5% for conventional fitness clubs in the US.
The message is clear: consumers will still buy gifts, but they’ll reframe purchases around necessity, advanced technology and practicality, trimming indulgence and deferring big-ticket splurges.
Holiday 2024 set a record with $241.4 billion in U.S. online sales (+8.7% YoY), with mobile surpassing 54% of transactions and Buy Now, Pay Later usage reaching an all-time high of $18.2 billion.
You can expect those digitally-driven behaviors to continue this year. Our survey confirms this behavior: 69% plan to shop online, compared to 61% in-store, with 20% using curbside pickup. Timing revolves around event-driven savings—Black Friday online (68%), Cyber Monday (58%), and Black Friday in-store (50%) remain the biggest anchors.
Price isn’t just a factor; it’s the deciding factor. In our survey, 82% named price as their most important shopping driver. Promotions are the top purchase trigger, with shoppers preferring:
Nearly 60% say they’ll use coupons always or frequently, particularly in stalwart couponing categories like groceries (63%), but also in apparel (52%), and electronics (44%). Simplicity and transparency are the throughline: shoppers want clear, direct value they can see instantly and act quickly - Consumer promotions can’t be ignored this season with deal-hunting holiday revelers.
Think your email marketing is as stale as last year’s punchbowl? Think again - consumers still lean heavily on email (80%) to receive promotions, with SMS/text (44%) and in-app notifications (33%) playing important supporting roles. When looking for the best deals, online search (81%) dominates, but in-store discovery (58%) and social media (43%) continue to matter.
The takeaway: omnichannel consistency is critical. Email, messaging, promotions, and fulfillment need to line up across online, social and physical experiences.
The combined story from our survey data and the broader market is clear: Holiday 2025 is a value-clarity contest. Consumers will spend, but they’ll scrutinize every dollar.
Get Your Yuletide Registers Ringing:
See the full results of the ' Unwrapping Consumer Intentions - Insights from a 2025 Pre-Holiday Consumer Survey' here.
Stay top of mind with inflation conscious consumers with the right combination of engagement, promotions and loyalty strategies. Contact us to discover how our best-in-class promotions and loyalty solutions can help to deliver value, drive sales and engage your customers this season.