Holiday shoppers rein in budgets 10% this year

As the weather cools – everywhere but Florida – and we look at Back-to-School shopping in the rearview mirror, hints of holiday begin to pop up. My local Dollar Tree display window showed a combination of Halloween, Fall and Christmas decorations. So, as we step into October and more holiday promos roll out, we have released our own findings on what holiday shopping will look like this year. And – spoiler alert – it does look different from what we have seen in recent years. Even with the CPI at a moderate 2.9%, the weight of persistently rising prices since 2021 is finally pushing down on holiday budgets this year. But it’s not all negative news. The retail story, as it usually is, is full of nuance and opportunity. Let’s dive into a few quick highlights.

Our holiday shopping survey revealed that consumers are pulling back budgets 10.2% this year, from $1,261 in 2024 to $1,133 per person. But not everyone is tightening their belts equally. The income breakdown reveals a much more complex story.

Households earning under $50,000 (i.e. modest earners) are cutting deep, reducing their holiday budgets by 24% to just $699. Middle-income families are moderating spending just slightly, trimming about 5% to $1,207. Meanwhile, high earners are doing the opposite – boosting their holiday spending by 26% to nearly $2,000.

What's particularly telling is where people are making these cuts. Gift budgets are staying almost exactly the same at $580, virtually unchanged from last year's $582. The money that's disappearing? It's coming from food, decorations, and entertainment. Americans, on average, are essentially saying they'll maintain the generosity but skip some of the extras.

Income tells an interesting tale here, as well. Modest earners are pulling back hard on gifts and experiences, but keeping their food & décor purchases basically the same. Middle-income earners are cutting most of the fat from food & décor, maintaining gift spending and upping experience budgets slightly by 6.7%. High earners are pressing the gas pedal on gift spending – up over 70% year-over-year – and moderately increasing food & décor. Their experience budgets are moderated only slightly at $502 per person – almost twice the average.

This creates an interesting dynamic for retailers and shopping centers. The customers who do show up with serious spending power are really ready to spend. But there's also a significant portion of shoppers who need to see clear value and smart pricing to take part fully in the season.

Here's a stat that should make every shopping center operator pay attention: shoppers who stay longer than 90 minutes spend $1,416 compared to just $792 for those quick 30-minute visits. That's a 79% increase in spending over an additional hour.

The connection between time and money becomes even clearer when you look at what keeps people around. Some 84.6% of shoppers plan to eat or drink something while they shop, with beverages leading at 51% and snacks close behind at 41.4%. This isn't just grabbing a quick coffee anymore. Food and drink have become integral parts of the shopping experience.

The practical implications are straightforward. Shopping centers that create comfortable – and delightful – spaces for people to pause, recharge, and refuel are directly affecting their bottom line. Phone charging stations with cozy seating near anchor stores, quality beverage options, and spaces that invite lingering rather than rushing through can transform a quick errand into a longer, more profitable visit.

The most successful centers are thinking beyond just retail space. They're creating environments where spending 90 minutes feels natural and enjoyable.

For years, our holiday shopping surveys have revealed an increased penchant among consumers for self-gifting. Every year, we’ve seen an increase in the percent of shoppers picking up a little something – or many things – for themselves while they check off their gift lists. Well, this year, for the first time we see a pullback in self-indulgence. A full 25% of shoppers plan to skip personal purchases entirely, up from just 17.3% last year. Even in categories where people traditionally treat themselves, the numbers are dropping significantly. Electronics self-gifting fell from 47.5% to just 32%.

The trend shows up across categories. Clothing and shoes are still the top self-gift choice but dropped from 50.8% to 47.6%. Most other self-gifting categories saw similar declines. It's as if shoppers are asking themselves "Do I really need this for me, or should this money go toward someone else's gift?"

For retailers, this shift suggests that marketing focused on self-indulgence might be less effective this season than messaging that emphasizes finding the perfect gift for others. Consumers are approaching purchases with different priorities than in previous years.

These three trends together suggest a holiday season that's more mindful, more focused, and in some ways more generous in spirit than recent years. Shoppers are making deliberate choices about where their money goes, spending more time in places that offer genuine value and enjoyment, and putting gift-giving ahead of self-gifting. It's a more thoughtful approach to the holidays, even as overall spending pulls back.