Deloitte: Average holiday spend to decline 10%; pullback sharpest among Gen Z
Consumers are downbeat regarding the economy — and expect higher prices — as they head into the holiday season.
More than half (57%) of U.S. consumers said they expect the economy to weaken next year, according to Deloitte’s “2025 Holiday Retail Survey.” It is the least optimistic outlook since the consulting firm started tracking economic sentiment in 1997.
Surveyed consumers plan to spend an average of $1,595 this season, down 10% year over year. Respondents expect to reduce spending on both retail goods, expected to fall 14% year over year, and experiences, expected to fall 6%. The decline comes as 77% of surveyed consumers expect higher prices on holiday items.
Nearly all generations and income groups surveyed plan to pull back this season, with younger consumers in particular feeling the pressure. Spending among Gen Z shoppers is expected to decline 34% year over year compared to 13% year over year for millennials. Only Gen X shoppers plan to spend more (up 3% year over year).
Most consumers surveyed plan to seek out deals (89%), which includes shopping during promotional weeks (75%), and adding items to wish lists and waiting for deals (49%). They also plan to trade down on brands and retailers (77%), re-gift items they don't like or want (52%), and even make their own gifts (49%).
Other key findings from the Deloitte survey are below.
- One-quarter (24%) of shoppers' budgets is likely to be exhausted by the end of October — the highest amount observed in the last five years. Traffic is likely to peak between late November and early December.
- Social media leads holiday inspiration with 59% of those surveyed planning to use it in their shopping. Planned use of GenAI doubled over last year with 33% of shoppers planning to use it
- More than two-thirds (70%) of holiday shoppers who responded to the survey plan to shop during Thanksgiving week, which is similar to last year, but up 23 percentage points over the last five years.
- Surveyed holiday shoppers plan to spend most of their budget at big box retailers (39%) and online retailers (36%) as they seek out value. However, more gifts are expected to be purchased online (56%) compared to in-store (44%).
- Among respondents, 44% will consider purchasing luxury goods as gifts this holiday season, however one-quarter (25%) of shoppers surveyed may buy pre-owned luxury items instead.
- To maximize their holiday budgets, surveyed shoppers plan to cut back on non-gift purchases like hosting, clothing and décor, down 22% year over year.
- One-quarter (26%) of consumers surveyed plan to use loyalty points (versus 20% in 2024) to further stretch their dollars and ease holiday expenses.
"While the upcoming holiday season is marked by economic uncertainty, the pull of tradition seems to have many consumers doing all they can to spread holiday cheer,” said Natalie Martini, vice chair and U.S. retail and consumer products sector leader, Deloitte. “This includes seeking out value and expanding the shopping window to ensure they capture the best deals to make their holiday dollars go further. To meet and engage shoppers where they are, retailers that provide value, not just the lowest price could be positioned for a more successful holiday season and 2026."
Deloitte's "2025 Holiday Retail Survey" is based on a survey of 4,270 consumers conducted online by an independent research company and fielded between Aug. 27 and Sept. 5.
