Shoppers Tighten the Reins With a 5.3% Holiday Spending Pullback This Season

Santa’s workshop might need to downsize this year, as American shoppers prepare to tighten their belts this holiday season. Consumer spending is projected to fall 5.3% year-over-year to an average of $1.55K, marking the first pullback since 2020, according to PwC’s Holiday Outlook survey. Rising costs and tariff anxieties are hurting budgets, with 84% of respondents expecting to cut back spending in the coming months.

• Gift budgets are set to see an 11% drop compared to last year, with the sharpest decline coming from Gen Z, who plan to slash their holiday budgets by 23%.
• Shoppers pack in nearly 40% of gift spending during Thanksgiving through Cyber Monday, leaving almost 80% of budgets spent by that point.

Holiday blues: Financial stress is mounting across the workforce, with only 47% of workers reporting financial well-being compared to 52% at the start of the year. While Gen Z tightens its purse strings, baby boomers plan to increase spending by 5%, creating a stark contrast in holiday shopping patterns. As retailers face nearly depleted pre-tariff inventory and prepare to pass higher costs to consumers, the holiday season will test whether promotional strategies can overcome wallet-conscious shoppers prioritizing experiences over material goods.