The 2025 holiday season is poised to be a unique blend of caution and celebration, as outlined in PwC’s Holiday Outlook 2025 report. With consumer spending expected to dip and preferences shifting across generations, retailers face a complex landscape. Here’s a deep dive into the key trends shaping this year’s holiday shopping season and how brands can adapt to win consumer loyalty.

A Season of Smarter Spending

Economic pressures, including rising costs and tariff concerns, are driving a more deliberate approach to holiday shopping. According to PwC’s survey, conducted between June 26 and July 9, 2025, consumers plan to reduce their holiday spending by an average of 5% compared to 2024, bringing the per-person average to $1,552. Gift spending is expected to see the sharpest decline, down 11% to $721, while travel and entertainment budgets remain stable with modest 1% increases.

  • Key Insight: 84% of consumers anticipate cutting back over the next six months, particularly on dining out (52%), clothing (36%), and big-ticket items (32%).
  • Tariff Impact: Shoppers concerned about tariffs plan to spend 10% less on gifts ($690 vs. $756 for less concerned) and are more likely to reduce overall spending (90% vs. 75%).

Despite these cutbacks, consumers are committed to preserving holiday traditions, prioritizing experiences like travel, hosting, and gifting that foster connection and normalcy.

Generational Divides Define the Season

Spending habits vary significantly across generations, reflecting distinct financial pressures and priorities:

  • Gen Z (ages 17–28): Facing a tough job market and limited savings, Gen Z plans to slash holiday budgets by 23%, a stark contrast to their 37% spending surge in 2024. They’re focusing 39% of their budget on self-gifting and prioritizing sustainability, with 63% opting for resale or upcycled products and 34% valuing wellness in purchases.
  • Millennials: Balancing peak earning years with rising costs, millennials expect a near-flat spend (down 1%) and allocate 62% of their budget to family gifts.
  • Baby Boomers: With more financial stability, boomers plan to increase spending by 5%, directing 67% toward family gifts.
  • Households with Children: These households are set to spend $2,349 on average, more than double the $1,089 spent by those without kids.

Retailers must tailor strategies to these diverse mindsets, crafting messages that resonate with each group’s values and financial realities.

The Rise of Value and Flexibility

Value is the cornerstone of 2025’s holiday season, with 78% of consumers seeking cheaper alternatives and 65% expecting deeper post-holiday discounts. Shoppers are also embracing flexible shopping and payment options:

  • Channel Parity: 51% plan to shop via online marketplaces, while 53% prefer in-store purchases, drawn by product interaction (48%), promotions (38%), and holiday atmosphere (25%).
  • Payment Shifts: Credit card use is up to 52% (from 40% in 2024), cash usage has risen to 48%, and gift cards are a preferred payment method for 27%. Digital payments like PayPal (27%) and buy now, pay later (9%) are also gaining traction.
  • Fulfillment Options: 70% prefer home delivery, but 39% opt for buy-online, pick-up-in-store, with same-day delivery popular among Gen Z and millennials (30%).

Gift cards are a standout choice, with 52% planning to give them to friends and 47% to family, offering budget-friendly generosity that drives store traffic in late December and early January.

Technology and Human Connection

Technology is reshaping how consumers discover and purchase gifts. Gen Z uses social media as much as search engines (43% for both) to find gift ideas, and 15% of Gen Z and millennials expect to use AI for gift recommendations. AI is also gaining ground for travel planning, with 68% using it to compare flights. However, when issues arise, shoppers—especially boomers (82%)—prefer human support via phone (64–70%) or in-person service (60%).

Retailers must balance digital innovation with reliable customer service to meet evolving expectations, ensuring visibility across social platforms, AI tools, and traditional channels.

The Five-Day Spending Sprint

The 2025 holiday calendar is compressed, with Thanksgiving to Cyber Monday (November 27–December 1) accounting for 39% of planned gift spending. Nearly 80% of holiday budgets will be spent by Cyber Monday’s end, amplifying the importance of early promotions. Trends like “Summerween” (early Halloween merchandising) highlight retailers’ efforts to extend the season, balancing full-price sales with strategic markdowns.

Food as the Heart of the Holidays

Food is a resilient category, reflecting both budget consciousness and emotional resonance. 72% of consumers plan to gather over home-cooked meals, driven by cost savings (39%), tradition (56%), and enjoyment (44%). Grocery spending is expected to rise for 45% of shoppers, partly due to inflation. Consumables are a top gift choice, with 26% buying for family, 28% for friends, and 23% for themselves. Gen Z and millennials lean toward wellness-focused options, while boomers prefer traditional treats.

Travel Holds Steady

Travel plans remain consistent, with 44% of consumers planning to travel, primarily to visit family and friends (48%). Gen Z is less likely to travel (55% vs. 61% in 2024), with 50% citing cost concerns and 49% preferring to stay home. Budget-conscious choices, like staying with family or driving, underscore the focus on affordability without sacrificing connection.

Winning the Season

The 2025 holiday season demands precision from retailers. Consumers are cautious but committed to celebrating, seeking value, flexibility, and emotional resonance. Brands that align with these priorities—through tailored messaging, omnichannel visibility, and offerings like gift cards and consumables—can turn seasonal purchases into lasting loyalty. By understanding generational nuances and leveraging technology alongside human support, retailers can navigate this complex season and stay in tune with shoppers well beyond December.

Source: PwC’s Holiday Outlook 2025, based on a survey of 4,000 US consumers, conducted June 26–July 9, 2025