Holiday spending is expected to fall, especially among young people

2025-09-07 08:33:00, Ekonomi CNA

This year's holiday sales are expected to be more tepid, as American consumers say they will save more on their purchases.

A survey conducted by consulting firm PwC shows that the average spending on gifts, travel and entertainment during the holidays will reach about $1,552 per consumer, marking a 5% decrease compared to a year ago.

However, the biggest drop comes from Generation Z (Gen Z). Young people aged 13 to 29 say they will spend an average of 23% less than a year ago, the strongest change among all generations.

This is a big change from last year, when they said they would spend 37% more. This withdrawal is one of the main factors influencing the overall decrease in holiday spending.

“Price is the love language for Gen Z,” said Ali Furman, U.S. consumer markets leader at PwC. “They grew up in a period of high costs. They are focused on price transparency and value.”

A Challenging Generation for Retailers
Furman emphasized that for retailers, Generation Z is both an opportunity and a challenge. With an average age of 22, they have lower salaries, new expenses, and often debt to pay off.

Moreover, they are more oriented towards experiences, such as concerts, trips and hotels, rather than purchasing new products. The increase in the prices of these experiences has further narrowed the scope for festive spending.

“Entertainment and vacations are taking up a larger and larger portion of their wallets, so there is less left for holiday gifts,” she added.

Another challenge for marketers is the rapid pace at which young people embrace trends and then abandon them. This forces businesses to constantly adapt to maintain the interest of this generation.

Uncertain backdrop for retailers
For retail companies, the survey findings underscore the uncertainty that will characterize this holiday season, especially due to price sensitivity and the debate over whether they should bear or pass on higher customs costs to consumers.

Meanwhile, spending expectations for other generations have remained more or less unchanged from a year ago. The only exception is baby boomers, who plan to spend an average of 5% more.

The PwC survey, conducted in late June and early July, included a representative sample of 4,000 American consumers.

Impact of tariffs and living costs
Consumers who are already feeling the pinch of rising living costs, such as higher energy bills, are also concerned about the possibility of price increases due to tariffs. This has made them more price-conscious and more likely to delay or buy earlier in order to take advantage of better prices.

“It’s not necessarily the tariffs themselves that are dictating this behavior,” Furman said. “It’s the fear that prices could go up, and that has made people more conscious of every expense.”/ Monitor.al