The latest consumer pulse survey released by U.S. audit, tax and advisory firm KPMG LLP suggests that U.S. consumers expect to spend an average of $847 on holiday shopping in 2025, up 4.6 percent from 2024 levels.

Most attribute increased spending to higher costs rather than having more discretionary funds or an improved financial situation this year.

  • Eight in 10 believe tariffs will result in price increases.
  • Six in 10 plan to shop for themselves, with expected spending on oneself up 20 percent year-over-year.

“The consumer is spending like a poker player with a small chip stack,” said Duleep Rodrigo, KPMG U.S. Consumer & Retail leader. “They know they can’t play every hand but are willing to go ‘all in’ on a promising hand with a high emotional payoff. There’s also a psychological element where the consumer is managing a complex set of uncertainties. Consumers have given themselves permission to prioritize their own needs and the brands that pivot to capture small moments of joy without breaking the bank will see an opportunity to grow this holiday season.”

Key Survey Findings

Consumers are approaching holiday spending with caution.

  • Expected Winter 2025 spending is up for essential categories, including groceries (+23 percent), automotive (+12 percent) and personal care (+7 percent), although the increases are less than last year. Consumers also expect to spend more on apparel (+3 percent) and personal care products (+2 percent).
  • Consumers expect to spend less on toys (-15 percent), furniture (-12 percent), and hobby supplies (-9 percent).
  • Despite their cautious outlook, holiday shopping is set to increase, with consumers planning to spend approximately 4.6 percent more on holiday shopping compared to last year.

Many consumers choose themselves and travel this holiday season.

  • The top gifts people want to receive are money (57 percent), gift cards (48 percent) and apparel (39 percent).
  • 57 percent plan to shop for themselves this holiday season, with expected spending on themself up 20 percent year-over-year for an average of $379.
  • Self-care is not limited to self-spending this year. Of the consumers who plan to participate in “Dry January” (30 percent), nearly half (48 percent) cited improving their overall health and well-being as the primary reason.
  • Expected holiday travel spending is up 10 percent year-over-year, with Americans expecting to spend an average of $1,127 on travel alone. This is driven by an increasing number of consumers making larger travel purchases of $1,000 or more.

Artificial intelligence is becoming a shopping companion.

  • 41 percent report using AI to research purchases, with another 22 percent indicating they’re interested in using it in the future.
  • GenAI use is even more pronounced among younger demographics, with more than half of Gen Z (56 percent) and Millennials (62 percent) using it for research purchases.
  • Nearly 70 percent of shoppers report making a purchase after seeing something on Amazon. One-third reported making a purchase after seeing something on YouTube and one-third reported making a purchase after seeing something on Instagram.

“AI shopping assistants are setting new standards for what personalized retail service can look like. When AI can make tailored gift recommendations, offer immediate style consultations, and support virtual try-on experiences, consumers receive a new level of attention and care that may have once seemed impossible to scale,” said Julia Wilson, principal at KPMG U.S.

Image courtesy Gallup