As holiday television ads begin hitting the airwaves even before Halloween, Americans are expecting to dig deeper into their wallets, purses and family budgets to pay for gifts this year. A new survey finds that 77% of shoppers expect to see higher prices this holiday season, up from 69% last year.
The Deloitte Holiday Retail Survey says shoppers predict that they will be paying more as they seek out quality, trust and meaningful experiences from the brands they choose. But as prices rise, spending may not keep pace.
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Spending expectations
The survey finds that the average consumer plans to spend about 10% less this year than they did in 2024 — about $1,595, down from $1,778. Deloitte also found that the reduction in spending will be seen across all age groups. Gen Z consumers — those between the ages of 18 and 28 — say they plan to reduce their holiday spending by about 34% this year.
Brian McCarthy, retail strategy leader for Deloitte, said the younger generation is likely more worried about their jobs and their future.
“They’re thinking about income and the job market and the concerns about the economy,” he said. Those worries, he added, are “going to throw a lot more pressure on them because they haven’t yet had time to sort of build up their savings or plan for less rosy economic environments.”
Inflation and cost factors
Deloitte researchers also believe inflationary pressures and higher prices on items such as groceries and housing are driving a reluctance to spend.
Millennials, or 29- to 44-year-olds, said their spending will drop by about 13%. Baby Boomers will likely tighten their belts by about 6%.
CNBC reports that the Deloitte findings sound a cautionary tone for retailers as the most crucial sales period of the year arrives and as Americans look forward to decorating and giving gifts.
Deloitte concludes that retailers will need to focus on offering value through easy-to-understand technology and a shopping experience that is worth the money.
The National Retail Federation will release its annual holiday forecast in November.
Economic headwinds as 2026 approaches
The Deloitte survey also found that 57% of respondents expect the economy to weaken over the next six months. That’s the highest level of negative economic sentiment since Deloitte began tracking such trends in 1997. Just 30% expected a weaker economy one year ago.
“We’ve been talking about the resilient consumer for a while now, that despite all these pressures, the U.S. consumer continues to spend and we keep seeing growth and spending for retail,” McCarthy said. “This outlook is starting to suggest that we’re getting towards the end of that resilience.”
