This holiday season, consumers plan to spend less and shop more strategically, according to Deloitte’s 2025 Holiday Retail Survey.

The report forecasts that consumers will spend an average of $1,595 this season, a 10% decline year-over-year, marking the first significant pullback since the pandemic. Spending among Gen Z shoppers is expected to decline 34% year-over-year and by 13% year-over-year for millennials.

Despite the decline, consumers still plan to celebrate — but with a sharper eye for value. Forty-four percent of respondents said they plan to purchase luxury items this season, however one-quarter of shoppers surveyed may buy pre-owned luxury items instead. To maximize their holiday budgets, surveyed shoppers also plan to cut back on non-gift purchases like hosting, clothing and décor, a decline of 22% year-over-year.

“While the upcoming holiday season is marked by economic uncertainty, the pull of tradition seems to have many consumers doing all they can to spread holiday cheer,” said Natalie Martini, vice chair and U.S. retail and consumer products sector leader, Deloitte.

“This includes seeking out value and expanding the shopping window to ensure they capture the best deals to make their holiday dollars go further. To meet and engage shoppers where they are, retailers that provide value, not just the lowest price could be positioned for a more successful holiday season and 2026.”

Fashion and accessories remain among the top gift categories, alongside gift cards. Nearly half of respondents (47%) said they plan to give experiential gifts, such as restaurant outings or spa visits. Self-gifting is expected to soften, with only one-third of consumers certain they will buy for themselves. 

Two-thirds of consumers plan to use digital tools to compare prices and products, while social media remains a key source of fashion inspiration for nearly 60% of shoppers. Use of generative AI has also doubled from last year, with one in three consumers planning to use it to discover and evaluate products.

“In a climate of economic uncertainty, retailers should recognize that traditional approaches may no longer be enough. To connect with today’s value-seeking consumers, it can be helpful to rethink strategies, embrace innovation, and tailor their strategies to engage consumers across generations and income levels. Retailers who adapt to these changing dynamics will likely be better equipped to navigate the season and foster lasting customer loyalty,” added Brian McCarthy, principal, retail strategy leader, Deloitte Consulting LLP.