Santa may be tightening his belt this year. With new tariffs, persistent inflation and a cooling job market weighing on consumer confidence, Americans are heading into the 2025 holiday season more cautious than they’ve been in years.
According to PwC’s 2025 Holiday Outlook survey, consumers expect their seasonal spending to dip 5% compared with 2024. Households with children will spend an estimated $2,349, while households without kids will spend $1,089, less than half as much. Beyond the holidays, 84% plan to cut back over the next six months, citing rising prices, newly implemented tariffs and the cost of living.
Deloitte’s annual holiday survey reveals a similar trend: Shoppers expect to spend $1,595 this season, down 10% from last year. Nearly eight in 10 respondents anticipate paying more for gifts and holiday trimmings, while 57% expect the economy to weaken in the coming year, the most pessimistic outlook Deloitte has recorded since 1997.
Those concerns are reshaping the way consumers shop. Instead of pulling out all the stops, Michele Hart-Henry of North Wilmington is looking for local, meaningful and relevant gifts. “I’m shopping small businesses as much as possible, and spending way less based on tariffs and concerns about the economy,” she said.
So how impactful will tariffs be? A LendingTree analysis finds this year’s tariff rates would have increased last year’s holiday shopping costs by $40.6 billion, with more than 70% of that falling directly on consumers. That’s about $132 per shopper. With 88% of clothing and 69% of electronics imported, that would have added $82 for apparel and $186 for electronics to the tab.
The National Retail Federation, a Washington, D.C.-based trade group, says 85% of consumers expect to pay higher prices because of trade policies. Tariffs will add about 10% to the price of toys. Further, there may be fewer playthings on the shelves as merchants keep inventories lean.
Still, NRF projects holiday sales will rise between 3.7% and 4.2%, surpassing $1 trillion for the first time.
Generational divides also are emerging. PwC found Gen Z expects to reduce holiday spending by 23%, far more than any other age group. Many are contending with career instability in a tighter job market and limited savings, making them sensitive to rising prices. In contrast, Millennials, Gen X and Baby Boomers, anticipate maintaining or even boosting their holiday budgets.
Of Gen Z shoppers, 95% saying they will seek deals, with 74% turning to social media or influencers for inspiration; 43% expect to use artificial intelligence to track down products or compare prices.
Digital shopping continues to gain momentum. About 55% plan to make most of their purchases online. Many will turn to AI for guidance.
When users ask AI Mode, a Google Search feature, for help, they receive curated product suggestions that include pricing, reviews and availability. Specific prompts such as “cozy sweaters for hiking in blue and white stripes” generate shoppable images that resemble a personalized catalog.
Hank Davis, a Baby Boomer from Chadds Ford, is confident in the economy and started his holiday shopping two months ago. He has embraced digital retail, crossing items off his list without ever getting in his car. So far, he’s purchased personalized pet items, luxury home fragrances and candles that are delivered right to his door.
He ticks off the list of websites he’s shopped so far. “Amazon, of course, Rufftopia, Antica Farmacista and Rosy Rings.”
Still, 33% of shoppers have yet to make a purchase and don’t plan to start until Black Friday, the official kickoff of holiday shopping. Black Friday remains a major draw, even as Thanksgiving Day openings have faded, with 65% of Black Friday shoppers hitting the stores.
Walmart, opening at 6 a.m., is advertising doorbusters on televisions, small kitchen appliances and popular toys. Target, also opening at 6 a.m., is offering deep discounts on electronics, apparel and holiday décor. Macy’s, which opens at 6 a.m., is promoting early deals on designer handbags, beauty sets and winter outerwear. Boscov’s is rolling out traditional doorbusters, including steep reductions on small appliances, comforters and basic apparel items. JCPenney and Kohl’s plan to open even earlier, at 5 a.m.
Shoppers say they don’t mind getting up early in pursuit of bargains, the Capital One survey says. Of Black Friday shoppers, 35% are willing to wait in line for 30 minutes to enter a store; 29% are willing to cool their heels for an hour or more.
Major shopping centers are expanding hours but not much. Concord Mall will open at 10 a.m. on Black Friday, the usual time. Christiana Mall will open at 8 a.m., two hours early, and stay open an hour later until 9 p.m. Dover Mall will open at 6 a.m. Tanger Outlets in Rehoboth Beach also will open at 6 a.m., with headline offers such as 50 percent off everything at Old Navy and 60 percent off the entire inventory at Banana Republic.
At Oh So Molly, a boutique in Wilmington’s Trolley Square, owner Molly Matlusky is opening on Sundays throughout December to give shoppers an extra day each week to peruse the store for gifts. Faux-fur vests and statement coats are among the store’s top sellers.
Each day, she promotes the store on TikTok and Instagram, setting a personal goal of selling to customers in all 50 states through the boutique’s website ohsomolly.com.
“So far, I’ve shipped to 30 states,” she said.
While she hasn’t had to raise prices on clothing and accessories, tariffs have pressured costs on the whimsical ornaments—shaped like sushi rolls, Diet Coke bottles and Botox syringes—displayed on the store’s Christmas tree.
Trade groups report ornament costs overall are up 10-20% this season, with prices on electronics, clothing and toys also ticking up. With the exception of imported alcohol, prices on food and candy gifts are largely unchanged.
So who’s going to mind the store? Seasonal hiring could hit the lowest in point in 15 years, the NRF said, forecasting 265,000 to 365,000 holiday positions. Meanwhile, more Americans are seeking seasonal gigs. Holiday job searches were up 27% year-over-year at the end of September, according to Indeed, a digital job board.
This year, merchants have the upper hand, says Allison Shrivastava, an economist at Indeed, a digital job board. Employers don’t have to offer incentives, such as signing bonuses or higher wages.
Amazon offered up to $3,000 in signing bonuses in 2023. In this holiday season, the company says temp jobs often fill up within minutes of being posted. Macy's didn't mention referral bonuses while announcing its holiday hiring plans, unlike 2023 when the department store paid up to $500 in rewards for recruiting sales associates.
Consumers are relying more on flexible payment methods. More than three-quarters of U.S. consumers now use buy-now-pay-later services that allow them to spread out payments over time. About half say they plan to use BNPL more this holiday season for gifts.
Concerned that gifts don’t fit everyone’s wish list? To ease shopper concerns in a year of uncertainty, many retailers are widening their return windows. Best Buy has extended its deadline to Jan. 15, 2026. Target, Walmart, Marshalls and Amazon have all expanded their holiday return periods, as well.
