As the holiday shopping season approaches, initial optimism surrounding consumer retail sales is encountering a stark reality check. While early forecasts for the fourth quarter pointed toward steady growth, a wave of more recent research paints a much more nuanced and cautious picture of the American consumer. Budgets are increasingly being squeezed, caught between the timeless desire to celebrate the festive season and the heavy, ongoing pressures of the broader U.S. economy.
Multiple holiday forecasts released this month indicate that consumer spending for the upcoming season may actually flatline or even decline compared to previous years. This hesitation is driven largely by lingering inflation, higher everyday living costs, and a growing skepticism regarding traditional retail promotions.
According to comprehensive data from Circana, fourth-quarter holiday spending is expected to range anywhere from a 1% decline to a modest 2.5% increase year over year. A survey of more than 3,500 U.S. shoppers conducted for the study revealed that household holiday budgets are projected to average $779 this year, down from $796 in 2025.
A separate projection from Simon-Kucher paints an even more conservative picture. Their research, which surveyed 1,500 U.S. adult consumers, projects a 5.5% year-over-year decline in spending for the holiday period, bringing the average budget down to $1,018 and effectively returning household holiday spending levels back to where they stood in 2024.
These contrasting forecasts have left both retailers and consumers on edge as the peak celebration period draws closer, prompting a noticeable shift toward highly value-conscious shopping behaviors across the country.
Shoppers Get More "Purposeful" About Spending
Despite the tighter budgets and economic headwinds, industry experts emphasize that consumers are not turning their backs on the holidays entirely. Instead, they are drastically changing how they approach their purchasing decisions.
"Consumers are not abandoning holiday spending, they’re becoming increasingly purposeful about where and how they spend," said Kiara Barrett, head of global thought leadership at Circana, in a recent statement.
Barrett noted that throughout the year, shoppers have increasingly shifted toward a new definition of value—one that extends far beyond the price tag alone. While affordability remains a primary concern for the vast majority of households, consumers are actively prioritizing purchases that create meaningful personal moments, strengthen interpersonal connections, improve everyday life, or simply deliver a much-needed sense of joy during stressful times.
Higher prices across the board are actively altering traditional shopping patterns. According to the Simon-Kucher data, approximately 77% of consumers report that inflation has fundamentally changed their shopping behaviors. Furthermore, consumer trust in traditional retail marketing appears to be eroding. Only 22% of surveyed shoppers believe that currently advertised discounts reflect true, genuine savings—representing a significant drop from the 46% who felt that way last year.
This sentiment is echoed by Deloitte’s 2026 Holiday Retail Survey, which was released last week. The survey, which polled 4,000 U.S. consumers, found that nearly 80% of shoppers are expecting higher prices on holiday purchases this year. Despite anticipating these elevated costs, Deloitte’s broader forecast projects that average household spending will still increase by 4% from last year, reaching an average of $1,654 for the holidays.
At the same time, the National Retail Federation (NRF) has issued a more optimistic macroeconomic forecast, predicting that overall holiday sales will increase by 4.2% and break past the milestone threshold of $1 trillion during the November and December shopping season.
However, retail analysts are quick to point out that aggregate sales growth figures can mask the stark financial realities experienced by individual households.
"While overall outlook is positive, we do expect that the experience of individual households will vary significantly based on income levels and wealth, and exposure to higher everyday costs like gasoline and other household essentials," said Mark Mathews, the NRF’s Chief Economist and Executive Director of Research, during a media call discussing the forecast.
"As we head into the holiday period, if gas prices remain higher, we do expect that this will have a larger impact on households at the lower end of the income spectrum," Mathews added. "Now, despite inflationary pressure, we expect goods prices to run lower than headline inflation as retailers respond to a price-conscious consumer."
To navigate these compounding financial pressures, value-conscious consumers are increasingly turning to early shopping as a primary strategic tool. Spreading out purchases over a longer period allows households to absorb the financial blow of the holiday season without relying heavily on high-interest credit cards or draining their liquid savings accounts.
Data from Circana shows that over half of consumers plan to begin their holiday shopping well before Thanksgiving, though Thanksgiving week itself remains a crucial deal event for holiday bargain hunters. Similarly, Simon-Kucher’s research indicates that more than 60% of consumers are shopping sooner this year specifically to spread out the mounting costs.
Deloitte’s findings reinforce this trend toward early purchasing. Among those surveyed, 22% stated they plan to start their holiday shopping even earlier than they did in 2025, and projections suggest that roughly 28% of total household holiday budgets will already be spent by the end of October.
Even as other research reports—such as those published by the International Council of Shopping Centers (ICSC) and Bain & Company—project overall retail spending increases for the holidays, consumer commentary across nearly all recent studies points to persistent and widespread financial anxiety.
According to Bain & Company, inflation will account for more than half of the nominal rise in total retail sales this season. Meanwhile, the consumer sentiment data highlights the underlying stress: 49% of respondents in the ICSC study expressed direct concern about whether they will be able to afford holiday gifts this year, and fully half of the surveyed participants noted that existing personal debt will heavily weigh on their holiday spending capabilities.