U.S. retailers are gearing up for a challenging 2025 holiday shopping season, with forecasts indicating the slowest sales growth since the pandemic and a notable decline in consumer spending.
Industry reports highlight a tempered outlook. Deloitte projects holiday sales growth between 2.9% and 3.4%, down from 4.2% in 2024. The slowdown is attributed to persistent inflation and the lingering effects of trade policies. E-commerce sales are expected to outpace in-store growth, rising 7% to 9%, while physical retail is forecasted to grow modestly by 2% to 2.2%. Mastercard similarly anticipates a 3.6% overall retail sales increase from November through December, with online sales climbing 7.9% and in-store sales up 2.3%.
A PwC survey reveals that average planned holiday expenditure is set to decline 5.3% year-over-year to $1,552, marking the sharpest drop since the pandemic. About 84% of consumers plan to reduce spending over the next six months, particularly on apparel, large purchases and dining out, driven by inflation and economic uncertainty.
Online sales growth is also slowing. Salesforce forecasts a modest 2.1% increase in U.S. online holiday sales to $288 billion, down from 4% growth last year. Retailers are expected to start promotions earlier, with Amazon, Target and Walmart launching discount events in October. Conversely, Adobe projects record online spending of $240.8 billion this holiday season—an 8.4% increase—highlighting the rising influence of mobile shopping, which is expected to account for 53.2% of online sales at $128.1 billion. Cyber Week alone could drive $40.6 billion in sales, a 7% rise.
Retailers are responding to economic uncertainty with varied strategies. Walmart and Macy’s have raised their forecasts, while companies like Mattel have lowered theirs. Recent earnings reports reveal tariffs as a significant factor, surging costs and reshaping consumer behavior. Walmart is facing margin pressures, implementing selective price hikes, with lower-income shoppers reducing basket sizes or choosing private-label products. Macy’s is managing higher-than-expected tariff impacts through targeted price increases and supplier negotiations, focusing on wealthier customers less sensitive to price changes. Mattel reported a double-digit drop in North American sales due to tariff-driven cost pressures despite international growth. Target sees rising costs, prompting more cautious consumer spending and tempered sales expectations.
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