Consumers are entering the 2025 holiday season with caution, and brands are feeling the change. According to several national retail outlooks, shoppers plan to spend less, hunt harder for deals, and downgrade on brands and retailers. Nearly 60% of consumers expect the economy to weaken in 2026, marking the least optimistic outlook in nearly three decades of tracked sentiment. As a result, purchasing decisions are becoming slower, more intentional, and heavily driven by perceived value.
A Season of Spending — with Restraint
Research indicates that Americans plan to spend less overall this holiday season, even though they still plan to celebrate and shop. Several trends stand out:
- Holiday spending is projected to dip by around 10% year over year.
- 89% of shoppers are actively hunting for deals.
- 77% say they plan to “trade down” to lower-tier brands or retailers.
- More than half of consumers expect higher prices on seasonal items.
This isn’t a decline in consumer desire — it’s a shift in priorities. Shoppers still want to give, decorate, gather, and experience the joy of the holidays. They are simply becoming much more deliberate about where they spend, why they spend, and what they get in return.
Not All Generations Are Reacting the Same Way
Holiday outlooks reveal a behavior gap across age groups. Gen X is the only generation expecting a slight increase in spending, while Gen Z, Millennials, and Boomers all plan to cut back, some by double digits. Even high-income households — usually more resilient during slow markets — report intentions to reduce seasonal shopping.
When all spending brackets pull back, marketers must respond with clarity, purpose, and strategy.
What This Means for Brand Strategy
In a value-driven climate, shoppers don’t simply want to save money — they want reassurance, relevance, and return on investment. Brands that break through this mindset will be those that:
- Lead with Value
Clear pricing, bundled offers, and transparent savings remove friction before a shopper reaches checkout. - Elevate Brand Trust
Consumers are more likely to buy from brands they believe in — especially when budgets are tight. Consistent messaging, strong reviews, and quality storytelling matter more than ever. - Personalize the Experience
Retailers who tailor messages by audience segment and intent will outperform one-size-fits-all campaigns. - Invest in Retention, Not Just Acquisition
Loyalty pays during economic pullbacks. Remarketing, email nurture sequences, and member-only perks keep customers close. - Stay Visible
Pulling back on marketing when consumers reduce their spending is the fastest way to lose market share. Brands that stay present through a downturn are the ones shoppers remember when confidence returns.
The Bottom Line
Consumer spending isn’t disappearing — it’s becoming more thoughtful. The brands that succeed this holiday season will be those offering real value, lowering decision barriers, and staying connected to their audience with authenticity and purpose.
Need a Stronger Holiday Strategy?
If your brand wants to navigate tighter consumer spending with smarter creative, clearer messaging, and more effective campaigns, Engel O’Neill can help you craft a plan that connects and converts this season.
Let’s discuss a strategy that resonates with your audience, even in a cautious market.
