US Seasonal Holiday Outlook for 2025: A Remix of Value, Caution, and Celebration
The 2025 holiday season is shaping up to be anything but predictable. According to PwC's Holiday Outlook 2025 report, consumer behavior is improvisational—like a jazz solo—driven by economic pressures, generational differences, and a quest for meaningful value amid rising costs. While overall spending is expected to dip slightly, traditions like gifting, gathering, and traveling remain resilient. Drawing from PwC's survey of 4,000 US consumers conducted in June-July 2025, this article breaks down the key trends, with insights from other recent forecasts for a fuller picture.
Overall Spending: A Modest Pullback Amid Resilience
PwC's findings indicate a 5% drop in average holiday spending per person, from last year's levels to about $1,552. Gift spending sees the sharpest decline at 11%, averaging $721, while travel and entertainment hold steady with just 1% increases. This marks the first notable decrease since 2020, influenced by concerns over inflation, tariffs, and the cost of living—84% of consumers plan to cut back over the next six months, particularly on dining out (52%), clothing (36%), and big-ticket items (32%).
However, celebration isn't fading. Shoppers are prioritizing rituals and experiences, suggesting that while budgets are tighter, the intent to maintain normalcy persists. Those worried about tariffs plan to spend 10% less on gifts ($690 vs. $756 for others).
Other forecasts paint a similar but slightly more optimistic picture of total retail sales. Bain & Company predicts 4.0% growth in US retail sales for the holidays. Mastercard Economics Institute forecasts 3.6% year-over-year growth in total retail sales (excluding autos) from November 1 to December 24. Reuters reports expectations of 2.9-3.4% rise, down from 4.2% last year. These figures suggest muted growth overall, aligning with PwC's per-person decline but indicating that population and other factors might buoy aggregate sales.
| Key Spending Stats from PwC | 2025 Average | Change from 2024 |
|-----------------------------|--------------|------------------|
| Total Holiday Spend | $1,552 | -5% |
| Gift Spend | $721 | -11% |
| Travel & Entertainment | Steady | +1% |
Generational Shifts: Gen Z Leads the Cutbacks
The holiday melody varies sharply by generation. Gen Z (ages 17-28) is slashing budgets by 23%—a stark reversal from their 37% surge in 2024—amid job market challenges, life transitions, and limited savings. 25% report worse financial situations than last year. They're allocating 39% of their spend to self-gifting and emphasizing sustainability: 63% opt for resale/upcycled products, and 34% prioritize health/wellness factors.
In contrast, millennials' spending is nearly flat (-1%), balancing peak earnings with high costs. Gen X holds steady, while baby boomers plan a 5% increase, focusing 67% on family gifts.
Households with children are outliers, spending over twice as much ($2,349 vs. $1,089 without kids). Regional differences also play in: Northeast and West consumers outspend the national average.
McKinsey echoes this value hunt, noting US consumers are shifting habits due to inflation, seeking early deals. Simon-Kucher's analysis highlights Gen Z and millennial "doom spending" potentially bolstering some sales, though overall caution prevails. (Wait, ids: web:7 is the second Reuters, but earlier is Newsweek, perhaps use relevant.)
The Hunt for Value: Deals, Tech, and Smart Choices
Value is the season's top note, with 78% seeking cheaper alternatives and 65% expecting post-holiday discounts. Internet searches for "discount" and "coupon code" rose 11% over the past year. Gift cards are popular (52% for friends, 47% for family) as a budget-friendly way to give generously.
Tech aids the hunt: Gen Z uses social media (43%) as much as search engines for ideas, and 15% of Gen Z/millennials plan AI for gift discovery. However, for issues, human touch wins—phone support is preferred by 64-70%.
Adobe Analytics forecasts online sales growth at 5.3%, down from 8.7%, with shoppers turning to sales events and buy-now-pay-later (BNPL). CNBC notes overall spending growth at 4%, below the 10-year average.
Flexibility in Channels and Payments
Shopping reaches near parity: 51% online marketplaces, 53% in-person. Draws include product interaction (48%), promotions (38%), and atmosphere (25%).
Payments shift: Credit cards up to 52% (from 40%), cash to 48% (from 41%), gift/prepaid cards to 27% (up 14%). BNPL is at 9%. Fulfillment: 70% home delivery, 39% buy-online-pickup-in-store, with same-day popular among younger gens (30%).
The Five Days That Define the Season
With Thanksgiving late (November 27), the calendar is compressed. ~40% of gift spending hits Thanksgiving to Cyber Monday, and ~80% by Cyber Monday's end. Retailers are extending seasons early, like "Summerween" in July.
Bain notes opportunities for retailers to stand out with actions amid 4% growth.
Snacks Over Sweaters: Food Takes Center Stage
Food emerges resilient: 72% plan home-cooked gatherings, driven by tradition (56%), enjoyment (44%), and savings (39%). 45% expect higher grocery spends, partly from inflation/tariffs. Consumables rank top-five gifts (26-28%).
Gen Z/millennials favor wellness options; boomers traditional indulgences.
## Home for the Holidays: Travel Holds Steady
44% plan travel, steady YoY, mainly to visit family/friends (48%). Gen Z dips to 55% (from 61%), citing costs (50%). Non-travelers prefer home (49%) or cite expenses (43%).
Wrapping Up: A Season of Nuanced Opportunities
The 2025 holidays reflect caution but not cancellation—spending may slow, but connections endure. For retailers, success lies in tailored strategies: value beyond prices, emotional resonance, and omnichannel flexibility. As PwC notes, understanding life stages and emotions can build lasting loyalty.
While PwC highlights a per-person dip, industry totals suggest modest growth (3-5%), per sources like Adobe and Mastercard. Economic signals could still shift, but one thing's clear: shoppers want meaning with their deals.
