PwC’s 2025 Holiday Outlook survey signals a shift in consumer seasonal spending, with an average decline of 5 percent from 2024 — the first notable drop since 2020. More broadly, 84 percent of surveyed respondents expect to cut back spending over the next six months, citing rising prices, new tariffs and the higher cost of living.

PwC, formerly known as PriceWaterhouseCoopers, polled about 4,000 U.S. consumers between June and July and found that shoppers, on average, plan to spend about $1,552 per person this year, down 5.3 percent from last year. The last comparable decline was in 2020, when average spend fell 7.6 percent to $1,187.

Holiday budgets remain elevated above pre-pandemic levels, including those of 2019 ($1,284), as well as ahead of the expected holiday spending levels reached in 2021 ($1,447), 2022 ($1,430) and 2023 ($1,530). Inflationary pressures have driven up budget plans.

PwC noted that its findings reflect consumer sentiment captured in June, at a time when there was more uncertainty around tariffs. Many of the tariffs have been delayed or paused, potentially leading to less impact on survey respondents estimated spend compared to the time the survey was conducted. PwC also noted that shifts in the economy can alter expected holiday purchasing behavior between now and December.

PwC also noted that any trade-offs from surveyed respondents looking to reduce spending are likely to reflect “quiet, thoughtful gift adjustments this holiday season and more modest at-home gatherings,” with the survey showing that most consumers remain eager to celebrate the upcoming holiday season.

“Even though consumer sentiment is down according to the University of Michigan, and overall spending is expected to dip based on our Holiday Outlook survey, we believe people will continue to prioritize holiday rituals and meaningful experiences,” PwC wrote in its study. “Our survey shows that many are still planning to travel, host celebrations and exchange gifts, even if it strains budgets and means adjusting elsewhere. And based on historical data, holiday spending typically rises year-over-year. For many people, the holiday season is the time for a bit of “retail therapy” — using purchases to lift spirits and preserve traditions. This behavior signals a pattern: Spending may shift, but the intent to maintain a sense of normalcy holds firm.”

Gift Spending to Decline 11 Percent
According to PwC’s 2025 Holiday Outlook survey, the biggest areas respondents plan to cut back over the next six months include dining out (52 percent), clothing (36 percent) and big-ticket items (32 percent). During the holiday season, specifically, 53 percent said that general price increases will likely affect their spending decisions this year.

The biggest holiday adjustment is expected to be in gift spending, which is anticipated to decrease by 11 percent to an average of $721, down from $814 in 2024, according to the survey. Travel and entertainment are holding steady with 1 percent increases. PwC said, “People are going to keep shopping, but with continuing concerns about tariffs and elevated prices (especially on electronics, apparel, toys, food, and household staples), value-conscious choices are likely to define the season.”

Across generations, finding value is a priority this season, with 78 percent of respondents seeking less expensive alternatives and 65 percent anticipating deeper, post-holiday discounts. Already, over the past year, Internet searches for “discount” and “coupon codes” have climbed by 11 percent.

The survey found that consumers concerned about tariffs, whether due to higher prices or limited availability, are tightening their spending more than in previous years. On gifts, consumers concerned about tariffs expect to spend 10 percent less — $690 compared with $756 for those who don’t express concern. Ninety percent of shoppers concerned about tariffs said they’re cutting back overall, compared to 75 percent of the general population.

Gen-Z Expects Biggest Holiday Budget Cuts
Gen Z respondents, ages 17 to 28, dragged down the survey, with respondents in that generation indicating they expect to reduce their holiday budgets by 23 percent. PwC noted that many Gen-Z consumers “are dealing with major life transitions and early careers in a tough job market, often without much in savings.”

The expected 23 percent pullback marks a sharp reversal from 2024, when Gen Z’s holiday budgets surged 37 percent year-over-year, which PwC notes as “how quickly spending patterns can swing in response to shifting economic realities.”

The survey found that 25 percent of Gen Z respondents stated their financial situation is worse than it was 12 months ago, compared to 17 percent who made the same statement in 2024.

By contrast, Millennials expect their holiday spending to remain nearly flat year-over-year, with a 1 percent decrease. PwC said Millennials are “likely balancing peak earning years with high fixed expenses, higher cost of living and tariff concerns.”

Meanwhile, the average spend for Baby Boomers is up 5 percent compared to 2024.

PwC said of Millennials and Boomers expected spend, “Together, these trends point to a broader ‘spending reset’ driven less by simple cost-consciousness and more by life stage pressures and evolving priorities.”

Gen Z is directing 39 percent of its smaller budget toward self-gifting. Both Millennials and Baby Boomers are focused on others, allocating 62 percent and 67 percent of their spending, respectively, to family gifts.

The survey still found Gen Z plans to balance budget concerns with a focus on sustainability and wellness when choosing what to buy this year.

According to the survey, 63 percent of Gen Z respondents are opting for resale and upcycled products, and one in three said they are reducing their consumption to mitigate environmental impact. In addition, 34 percent of Gen Z (versus 27 percent overall) said sustainability or health and wellness are top factors they consider when making holiday purchases, and more members of this generation read labels before purchasing food than other segments (29 percent versus 24 percent overall). Traditional drivers, such as price (49 percent), free shipping (42 percent) and promotions (38 percent), continue to influence their purchasing decisions.

Other findings from the 2025 PwC survey include:

  • For the first time, holiday gift shopping is nearing channel parity, with 51 percent of respondents planning to complete their purchases through online marketplaces (e.g., Amazon, eBay, Etsy) and 53 percent planning to shop in person. Nearly half (48 percent) said they are drawn into a retail store to interact with products directly, while promotions (38 percent) and the holiday atmosphere (25 percent) also attract them.
  • While 70 percent of all respondents prefer home delivery, 39 percent said they will buy online/pick up in-store. Same-day delivery is most popular among Gen Z and Millennials, with approximately 30 percent of each group stating that it is their preferred option for receiving items when shopping online.
  • According to the survey, 39 percent of total respondents plan to spend money on holiday gifts in the five days between Thanksgiving and Cyber Monday. More importantly, almost 80 percent of holiday gift budgets will have been spent by the end of Cyber Monday.
  • Fifty-two percent of surveyed respondents plan to give gift cards to friends and 47 percent to family members.
  • Among Gen-Z respondents, social media is used just as often as search engines to find gift ideas (43 percent for both).
  • Approximately 15 percent of Gen Z and Millennial respondents also reported expecting to utilize AI to find gift ideas, and 76 percent of Millennials indicated that they are likely to use AI for travel recommendations.
  • Households with children under the age of 18 are expected to spend an average of $2,349 this holiday season, more than double the $1,089 spent by those without children.

To read the full PwC 2025 Holiday Outlook report, go here.

Image courtesy PwC