Perhaps this year’s festive period will not prove to be as restrained or frugal as many economists and retailers initially anticipated. Although earlier economic forecasts warned that consumers would curtail discretionary purchases and scale back their holiday budgets, new research from PwC released on Tuesday reveals a notable shift in sentiment. According to the report, shoppers are now planning to increase their seasonal expenditures by an average of seven percent compared to what they had projected in June, signaling renewed optimism when it comes to gift-giving and holiday celebrations.
The latest data originate from PwC’s Holiday Sentiment survey, one of the consulting giant’s annual analyses designed to capture evolving consumer attitudes toward seasonal shopping. Conducted in October by the Big Four accounting firm, the survey indicates that the average consumer intends to spend approximately $770 on gifts this year — a marked increase from the $721 average reported in PwC’s Holiday Outlook study earlier in the summer. This upward adjustment in spending plans directly contradicts earlier warnings from market analysts and retail strategists who had predicted a potential downturn, fearing that shoppers would adopt a more cautious approach due to economic uncertainty, inflationary pressures, and lingering cost-of-living concerns.
PwC’s commentary on the findings describes this dynamic as emblematic of the complex tension shaping the 2025 holiday landscape. At the start of the season, many consumers expressed caution, claiming they would moderate their spending habits. Yet, their demonstrated financial behavior — specifically, their updated spending plans — suggests quite the opposite. The report explicitly characterizes this discrepancy as a classic “say-do gap,” a well-documented phenomenon in consumer psychology where individuals’ stated intentions fail to align with their actual purchasing decisions.
Interestingly, the acceleration in holiday spending appears to be driven primarily by two distinct demographic groups situated at opposite ends of the age spectrum: Baby Boomers and members of Generation Z. Respondents from the Baby Boomer cohort reported a significant increase in their intended outlays, rising from an average of $671 in June to an impressive $858 in October. Generation Z shoppers, who are generally younger and often more budget-conscious, also displayed a measurable rise in spending enthusiasm, lifting their planned average from $586 to $622. Meanwhile, spending intentions among Millennials trended lower, decreasing from $921 in June to $843 in the more recent survey. Generation X participants followed a similar pattern of moderation, with average expected expenditures slipping from $705 to $679.
As the broader retail sector approaches the critical holiday period, numerous industry organizations have also weighed in with their projections. The National Retail Federation, for instance, has noted that total holiday spending could, for the first time in history, surpass the one-trillion-dollar threshold. Despite reaching such an extraordinary milestone, the trade group tempered its optimism by forecasting that year-over-year growth in sales would likely fall short of the 4.3 percent rate recorded in the previous holiday cycle. Market research firm eMarketer — a corporate sibling of Business Insider — offered a slightly lower estimate, predicting a 3.6 percent rate of growth for holiday retail sales this year, reflecting a cautiously positive yet uneven economic environment.
Across retail chains and consumer-facing businesses, corporate messaging has been mixed. Major brands such as McDonald’s and Home Depot have cautioned that middle-income households, often considered the financial backbone of the American consumer base, are tightening their budgets. This signals that while certain demographic segments remain willing to indulge in festive spending, others are facing tangible economic constraints. In contrast, several other retailers have struck a noticeably more upbeat tone. Walmart, for example, has pointed to the success of smaller but significant shopping occasions — including the back-to-school rush and the Halloween season — to illustrate that consumers still allocate funds for meaningful celebrations when they perceive genuine value and affordability in their purchases.
Discount retailers, too, are refining their strategies to align with this nuanced consumer behavior. Dollar General, for example, has emphasized its commitment to offering a wide selection of low-cost items, including countless gift options priced around the one-dollar mark, in anticipation of the peak holiday shopping rush. These tactics aim to attract value-conscious customers who remain eager to participate in the festivities without overspending.
PwC’s report concludes on a note of caution. Should consumers indeed follow through on their more ambitious spending plans this December, such behavior may come at the cost of reduced expenditures in the months that follow. The first quarter of any calendar year traditionally experiences a slowdown in retail activity, as households reconcile post-holiday credit card bills and adjust their budgets. The report encapsulates this dynamic succinctly: when it comes to holiday celebrations, consumers consistently demonstrate a willingness to stretch their financial limits in the pursuit of joy and generosity — even if it means tightening their belts once the new year begins.
Sourse: https://www.businessinsider.com/gen-z-baby-boomers-spend-more-holiday-gifts-survey-2025-11
