#United States #New York #Holiday Spending #Inflation Concerns #Consumer Shifts

Americans Anticipate Reduced Holiday Spending in 2025 Amid Inflation Concerns

As the holiday season approaches in 2025, Americans are preparing to reign in their spending. According to a recent survey by The Conference Board, the expected average holiday expenditure per consumer is projected to be around $990. This represents a notable decrease of approximately 6.9% compared to the previous year, where spending was around $1,063, and aligns closely with figures from 2023. The decline in anticipated expenditure is largely attributed to ongoing inflation and the need for consumers to tighten their budgets.

Key Findings of the Holiday Spending Survey

Decrease in Gift and Non-Gift Spending

The survey indicates that consumers are likely to spend about $650 on gifts, down from $677 a year prior, marking the lowest projected level since 2022. On non-gift items, such as food and decorations, spending is expected to decrease by 12%, with an average budget of $340. When adjusting these numbers for inflation, they drop to even lower amounts when compared to pre-pandemic times, emphasizing the financial restraint felt by many households.

"U.S. consumers are approaching this holiday season with caution," stated Stephanie Guichard, Senior Economist at The Conference Board. According to Guichard, extended periods of high inflation have strained budgets and created a more frugal environment for holiday spending. Younger demographics and more affluent consumers are cutting back the most, while those aged over 65 and earning less than $50,000 have surprisingly decided to spend a bit more.

Shopping Trends and Preferences

To maximize their limited budgets, consumers are prioritizing discounts and promotions. The majority of respondents acknowledged that they would seek out sales opportunities to balance their expenses, resulting in an inclination to purchase items that are perceived as necessities rather than luxury items. In fact, merely 30% of those surveyed plan to travel during the holidays, a slight decrease from last year.

Demographic Insights

• - Younger Consumers: Young adults typically under 35 are leading the charge in reduced spending on gifts for 2025. Meanwhile, adults aged 35-45 and 55-64 contribute to a similar decline in non-gift expenditures.
• - Older Consumers: Only those aged 65 and over are reportedly increasing their spending on both gifts and non-gift purchases.
• - Income Bracket Impact: Individuals earning $75-100K and those with incomes exceeding $125K intend to lower their holiday budget this year. Conversely, those making under $50K are slightly increasing their spending.

Online Shopping Maintains Popularity

A significant 43% of consumers expect to buy at least half of their holiday gifts online, consistent with trends from 2024. Interestingly, this number is even higher among those earning over $125K, at nearly 54%. While 9% of shoppers do not plan to purchase gifts online, this represents a minor increase from the same time last year.

Shifts in Gift Preferences

The data points to a shift in purchasing intentions, with toys and travel-related gifts gaining traction over previous years. Additionally, there is a noticeable increase in gift card selections, alongside a decline in the popularity of traditional gifts like books or sports equipment.

Staying Close to Home

This year, 70% of consumers prefer staying home for the holidays rather than traveling, slightly more than in 2024. For those choosing to travel, the majority are opting for road trips, using personal vehicles or rideshare services. However, air travel is on the rise, with 45% of travelers planning on flying during the festive season, a slight increase from the prior year.

Overall, this holiday season reflects a cautious sentiment among U.S. consumers as they navigate their budgets in light of inflationary pressures. The focus on practical gifting and discount shopping illustrates how economic factors are steering consumer behavior in 2025.

Conclusion

As we progress toward the holiday season, it is clear that financial considerations will play a prominent role in shaping how Americans approach their holiday shopping this year. The findings of The Conference Board serve as a key indicator of consumer sentiment, highlighting the intersection of economic pressures and holiday traditions during uncertain times.