Anticipated Higher Prices Shape 2025 Holiday Shopping Behavior

As the 2025 holiday shopping season approaches, U.S. consumers are preparing for a landscape marked by higher prices and cautious spending habits. A recent survey by KPMG indicates that shoppers expect to spend an average of $847, reflecting a 4.6 percent increase from the previous year. This rise in anticipated spending is largely attributed to expectations of higher costs driven by tariffs and inflation, rather than an improvement in financial circumstances.

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The economic backdrop for this holiday season includes a reported 2.9 percent increase in consumer prices from the previous year, with core prices rising by 3.1 percent. Eighty percent of consumers believe that tariffs will contribute to price increases, prompting many to adjust their shopping strategies. According to the Circana survey, over 80 percent of respondents expect prices to be higher, leading to a more spread-out and unpredictable shopping season.

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In response to these economic pressures, consumers are adopting new shopping behaviors. Nearly half plan to start their holiday shopping before Thanksgiving, with 24 percent having already begun or completed their purchases. This shift is aimed at avoiding potential price hikes and capitalizing on early-season promotions. Retail expert Marshal Cohen notes that the volatility in consumer sentiment will significantly influence holiday spending outcomes.

It’s Christmas Already? Consumers Jump-Start the Season, Adapt for Tariffs2025 Holiday Shopping Trends: Consumers Expect Higher Prices and Plan to Spend MoreCircana Survey Sees Earlier Start to Holiday Shopping Amid Bargain HuntingJLL Survey Forecasts Steep Holiday Spending Decline on Lower-Income WeaknessICSC Forecasts Higher, Yet More Selective, Holiday Spending in 2025

While overall spending is projected to rise, many consumers are trimming their budgets in specific categories. KPMG's survey reveals expected declines in spending on toys (-15 percent), furniture (-12 percent), and hobby supplies (-9 percent). Conversely, spending on essentials such as groceries is expected to increase by 23 percent. Consumers are also prioritizing practical purchases, with a focus on home appliances and lower-cost indulgences like beauty products.

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Retailers are responding to these consumer trends by emphasizing competitive pricing and value-oriented offerings. JLL's survey highlights a growing divide in holiday spending, with affluent households increasing their budgets while lower-income consumers cut back significantly. This bifurcation is prompting retailers to adapt their strategies, focusing on creating engaging shopping experiences that resonate with budget-conscious consumers.

JLL Survey Forecasts Steep Holiday Spending Decline on Lower-Income WeaknessNewsweekKPMG Sees U.S. Consumers Spending 4.6 Percent More for Holiday 2025It’s Christmas Already? Consumers Jump-Start the Season, Adapt for TariffsICSC Forecasts Higher, Yet More Selective, Holiday Spending in 20252025 Holiday Shopping Trends: Consumers Expect Higher Prices and Plan to Spend More

KPMG's Duleep Rodrigo remarked, “The consumer is spending like a poker player with a small chip stack,” indicating a cautious yet strategic approach to holiday spending. ICSC President Tom McGee emphasized the resilience of consumers, stating, “Despite economic concerns, our survey shows that consumers are committed to their holiday traditions and plan to shop.”

ICSC Forecasts Higher, Yet More Selective, Holiday Spending in 2025

• “The consumer is spending like a poker player with a small chip stack,” — Duleep Rodrigo, KPMG U.S. Consumer & Retail Leader

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• “Despite economic concerns, our survey shows that consumers are committed to their holiday traditions and plan to shop,” — Tom McGee, ICSC President and CEO

ICSC Forecasts Higher, Yet More Selective, Holiday Spending in 2025

The 2025 holiday shopping season is poised to be characterized by higher prices and a more selective consumer base. As shoppers navigate economic uncertainties, their strategies will likely prioritize value and practicality, shaping a unique retail environment that challenges traditional spending patterns. Retailers must adapt to these changes to effectively engage consumers and meet their evolving needs.

2025 Holiday Shopping Trends: Consumers Expect Higher Prices and Plan to Spend More