As the festive season approaches, early forecasts that pointed toward steady retail growth are giving way to a more nuanced and cautious reality. While some prominent industry groups continue to project robust spending figures, fresh research reveals that everyday consumers are feeling the pinch of the broader United States economy, forcing them to carefully weigh their desire to celebrate against the persistent pressures of inflation, household expenses, and personal debt.
The divergence in recent fourth-quarter forecasts highlights the complexity of the current retail landscape. Two major holiday studies released this month suggest that consumer spending may actually contract as household budgets are stretched thin. According to data compiled by Circana from a survey of over 3,500 U.S. shoppers, fourth-quarter holiday spending is expected to range anywhere from a 1% decline year-over-year to a modest 2.5% increase. The same research indicates that average consumer budgets are projected to slip to $779, down from $796 in the previous year.
A separate study conducted by Simon-Kucher, which surveyed 1,500 U.S. adult consumers, paints an even more conservative picture. The firm projects a 5.5% year-over-year decline in spending for the holiday period, bringing the average planned budget down to $1,018 and effectively returning spending levels back to those seen in 2024. These shifting projections have left both retailers and shoppers on edge as the crucial November and December selling window draws near, driving a noticeable pivot toward more value-conscious and calculated shopping behaviors across the marketplace.
Shoppers Get More ‘Purposeful’ About Spending
Rather than abandoning holiday traditions altogether, consumers are radically altering how they approach gift-giving and seasonal purchases. Industry experts note that shoppers are becoming significantly more deliberate about where and how they allocate their hard-earned dollars.
Kiara Barrett, head of global thought leadership at Circana, emphasized this psychological shift in a recent statement, noting that consumers are not walking away from the holidays, but rather becoming increasingly purposeful. Throughout 2026, market observers have witnessed shoppers gravitate toward a newly defined standard of value—one that stretches far beyond the price tag alone. While basic affordability remains a primary concern for millions of households, shoppers are fiercely prioritizing purchases that foster meaningful personal moments, strengthen relationships, enhance everyday life, or simply deliver a much-needed sense of joy during turbulent economic times.
At the same time, higher prices across virtually all retail categories are fundamentally rewriting traditional spending playbooks. Data from Simon-Kucher reveals that approximately 77% of consumers report that inflation has directly altered their shopping habits. Furthermore, consumer trust in traditional retail promotions appears to be eroding; only 22% of respondents believe that advertised discounts genuinely reflect true savings, marking a dramatic drop from the 46% who felt that way just a year prior.
This skepticism mirrors findings from Deloitte’s 2026 Holiday Retail Survey, released recently after polling 4,000 U.S. consumers. Nearly 80% of shoppers told Deloitte they expect to encounter higher prices on their holiday purchases this year. Despite this widespread expectation of elevated costs, Deloitte’s models still project that the average household spend will climb 4% compared to last year, reaching an estimated $1,654 per household for the season.
Adding to the optimistic side of the ledger, the National Retail Federation has issued a forecast predicting that overall holiday sales will increase by 4.2%, ultimately crossing the monumental threshold of $1 trillion during the November and December shopping season.
However, industry analysts are quick to point out that headline figures can mask deep disparities among individual consumers. Mark Mathews, the NRF’s chief economist and executive director of research, addressed these nuances during a recent media call, explaining that while the overarching retail outlook remains positive, the actual financial experience of individual households will vary significantly. Performance will depend heavily on household income levels, accumulated wealth, and exposure to stubborn everyday costs like gasoline and other essential goods.
Mathews warned that if gas prices remain elevated heading deeper into the holiday period, the burden will fall disproportionately on lower-income households, which have less financial cushion to absorb inflationary shocks. On the brighter side, Mathews noted that despite persistent macroeconomic pressures, actual goods prices are expected to run lower than the general headline inflation rate as retailers aggressively adjust their pricing strategies to cater to a price-conscious and cautious consumer base.
Spreading the Cost Out Early
To navigate these competing financial pressures, savvy shoppers are increasingly altering their timelines. Shopping earlier in the year has emerged as one of the most popular strategies for consumers looking to maintain control over their holiday budgets without sacrificing the holiday experience.
According to Circana’s data, more than half of all consumers plan to kick off their holiday shopping before Thanksgiving arrives, though Thanksgiving week itself remains a critical milestone for major promotional events and doorbuster deals. The Simon-Kucher research echoes this sentiment, showing that over 60% of shoppers are choosing to start their purchasing journeys sooner this year as a practical method to spread out the financial impact over a longer period.
This trend toward early shopping is further supported by Deloitte’s findings, which indicate that 22% of surveyed shoppers plan to begin their holiday buying even earlier than they did in 2025. In fact, projections suggest that roughly 28% of the total expected holiday budget will already be spent by the time October comes to a close.
Even as other recent studies—including research published by the International Council of Shopping Centers and Bain & Company—point toward nominal increases in overall retail spend, consumers have consistently voiced underlying financial stress across almost every major market survey.
Bain & Company notes that inflation will single-handedly account for more than half of the nominal rise in projected holiday sales, suggesting that physical volume may not be growing nearly as fast as the dollar amounts indicate. Compounding this anxiety, ICSC research reveals that 49% of respondents are actively worried about whether they will be able to afford gifts for their loved ones this year, while half of all surveyed individuals report that lingering personal debt will heavily weigh down their holiday spending capacity as they close out the year.
