Americans plan to spend less this holiday season, survey shows

As the holiday season approaches, Americans are preparing to rein in their spending more than ever before. A recent survey conducted by accounting firm PwC revealed that the average holiday spending per person is expected to decrease to $1,552, a 5% drop from the previous year. This reduction in spending reflects the ongoing challenges faced by consumers, such as high prices and tariffs.

According to Alison Furman, PwC’s consumer markets industry leader, consumers are feeling the impact of inflation on their wallets, prompting them to be more cautious with their holiday budgets. The survey, which included 4,000 Americans spanning different generations, highlighted a shift in consumer behavior towards more strategic spending in the face of economic uncertainty.

Among the generations surveyed, Gen Z respondents, aged 17 to 28, expressed the highest intention to cut back on holiday spending, with a projected 23% decrease in their budgets. This trend is attributed to the challenging job market and rising costs faced by young Americans. Overall, 84% of consumers are expected to reduce their spending in the coming months, reflecting a general sense of financial caution.

The anticipated decrease in holiday spending could have significant implications for retailers, who rely on holiday sales to boost their revenue towards the end of the year. Since 2019, holiday sales during November and December have accounted for 19% of total retail revenue for the year, according to the National Retail Federation.

The survey also highlighted concerns over tariffs and high prices as key factors influencing consumer confidence and spending decisions. With inflation expectations on the rise and discretionary spending trends shifting, consumers are approaching holiday shopping more deliberately, with a focus on saving money.

Furman emphasized the importance of seeking discounts and deals, as consumers become more price-conscious in light of potential tariff-related price increases. Internet searches for discounts and coupon codes have surged, indicating a growing interest in cost-saving measures. The report suggests that consumers are likely to do a significant portion of their holiday gift shopping during the period between Thanksgiving and Cyber Monday, taking advantage of promotional offers and early shopping opportunities.

As consumers navigate the holiday shopping landscape with caution, retailers are advised to prepare for a more strategic and deal-oriented approach from shoppers. By understanding consumer preferences and behaviors, businesses can adapt their strategies to meet the evolving demands of the market during this critical period of the year.