Consumers rein in holiday budgets

Consumers are getting strategic about stretching their holiday dollars. While Americans still embrace the holiday spirit, they're approaching the season with more intentional spending and focused shopping journeys. This year reveals a clear emphasis on value-driven decisions, in-store visits that maximize every dollar, and a blend of digital inspiration with physical retail experiences.

In this report, we examine how people across the country plan to navigate the holiday season with tighter budgets but unchanged enthusiasm. We surveyed 1,001 consumers and discovered notable changes in spending patterns, shopping behaviors, and the factors driving where and how they shop. Read on to discover our key insights into this more selective yet still festive holiday shopping season.

The economic climate has finally caught up with holiday enthusiasm as American households dramatically scale back their spending plans for 2025. Average holiday budgets have dropped 10.2% from $1,261 to $1,133 per person, marking a significant retreat from last year's more optimistic spending levels. This pullback represents more than just belt-tightening. It signals a shift toward more thoughtful, strategic holiday spending. Consumers are no longer willing to stretch their finances for holiday excess, instead choosing to focus their limited resources on what truly brings joy during the season.

Economic inequality becomes starkly visible during the 2025 holiday season, with spending patterns revealing a deeply divided consumer landscape. Higher-income households earning over $150,000 are actually increasing their planned spending by 26% to $1,963, while lower-income households under $50,000 are cutting back severely to just $699 - a steep 24% decrease from $915 last year. This growing divide indicates a holiday season that's increasingly bifurcated: budget-conscious and constrained among lower earners, but indulgent and experience-focused at the top. Affluent shoppers are expanding budgets across all categories (gifts, food & decor, and experiences), essentially carrying overall holiday spending while other income groups pull back.

One of the most striking discoveries in this year's research reveals the power of dwell time in driving holiday revenue. Shoppers who spend over 90 minutes at retail locations generate $1,416 in spending compared to just $792 for those making quick visits under 30 minutes – a substantial 79% increase that makes extended visits the single most powerful lever for driving holiday revenue. This trend reinforces that retailers and shopping centers must invest heavily in creating comfortable, engaging environments that encourage customers to linger. The data shows clear spending jumps at each dwell time threshold: 30-60 minutes yields $1,058; 60-90 minutes reaches $1,175; and beyond 90 minutes where spending peaks.

Americans are choosing others over themselves this holiday. A notable 25% of shoppers plan to skip personal purchases entirely, up significantly from just 17.3% last year. Even more telling, the percent of shoppers planning to buy electronics for themselves plummeted from 47.5% to just 32%, suggesting consumers are making conscious choices to prioritize gift-giving over personal indulgence. Meanwhile, spending on gifts for others remains virtually unchanged at $580 compared to $582 last year, demonstrating that the spirit of giving endures even as discretionary spending wanes.

Despite the continued dominance of e-commerce, the 2025 holiday season confirms that physical retail remains central to the American shopping experience. Only 16.3% of consumers plan to shop exclusively online, meaning over 83% will incorporate physical stores into their holiday journey in some capacity. Nearly three-quarters of consumers plan to use multiple channels to complete their holiday lists, though enclosed mall shopping has declined to 49.9% from previous highs. The data reveals that while online ordering for home delivery captures 83.9% of consumers, the vast majority still value the tangible experience that physical retail provides, whether for browsing, immediate gratification, or the social aspects of holiday shopping.

Economic pressures are driving consumers toward value-oriented, efficient shopping destinations over more premium retail experiences. Mass merchandisers bounce back to capture 62.2% of holiday shoppers' plans, reclaiming their position as the most popular shopping destination after falling in popularity last year. This resurgence reflects consumers' demand for competitive pricing, extensive product selection, and convenient one-stop shopping experiences that mass merchandisers deliver effectively. While department stores maintain strong appeal at 50.4% of shoppers, their relative position has been weakened by this mass merchandiser revival. 

The pursuit of bargains is now a permanent fixture of American holiday shopping culture. An overwhelming 71% of shoppers prioritize stores offering low prices or sales above all other factors, while 60.6% actively seek more sales than usual, indicating that aggressive bargain hunting is here to stay. The percent of shoppers planning to take advantage of deal days like Black Friday and Cyber Monday has increased to 46.4%, suggesting these major shopping events retain importance for shoppers. While shoppers plan to take advantage of deal days, nearly half (44.6%) also plan to look for deals throughout the season, demonstrating that promotional periods are no longer confined to specific days but extend across the entire shopping calendar.

Holiday shopping has become intrinsically linked with food and beverage consumption, as 84.6% of shoppers plan to eat or drink something while shopping this season. Beverages lead the charge with 51% of shoppers planning purchases, while snacks follow closely at 41.4%. This trend varies significantly by demographics — higher-income shoppers are much more likely to indulge in all food offerings, while younger consumers favor fast casual restaurants and older generations prefer full-service meals when they do combine food with shopping. The relationship with dwell time is particularly telling: longer visits directly correlate with higher rates of both snacking and restaurant visits, showing that food and beverage offerings are becoming profit centers rather than afterthoughts.

Consumer shopping behavior has become notably more concentrated and strategic, with 46% of shoppers planning to visit just 3-5 stores to complete their holiday lists. An additional 13.2% plan to visit only 1-2 stores, meaning nearly two-thirds of shoppers will finish their holiday shopping with five or fewer retail stops. This represents a clear preference for efficiency over exhaustive retail exploration, suggesting that the days of marathon shopping excursions are waning in favor of more targeted, purposeful retail visits. Only 23.7% of consumers plan to visit 6-9 stores, while just 7.8% intend to visit 10 or more locations, indicating that consumers are prioritizing strategic shopping over comprehensive retail experiences.

Social media has permanently embedded itself into the holiday shopping process, with 79% of consumers turning to various platforms for inspiration and guidance. Platform preferences reveal distinct generational divides: Gen Z overwhelmingly favors TikTok at 46.2% for dynamic, video-based product showcases, while Millennials display more balanced usage across Facebook, Instagram, and X. Perhaps most telling is that among Boomer shoppers over 60, while 57.9% completely avoid social media for holiday inspiration, those who do engage predominantly choose Facebook and Instagram, demonstrating these platforms' ability to bridge generational gaps in social commerce. This trend confirms that social media influence on shopping decisions has moved from experimental to essential, fundamentally changing how consumers discover, research, and decide on holiday purchases.

Want to dive deeper into our holiday shopping insights? Download the report for more information…