Holiday Spending Trends: How 2025 is Shaping Up

Highlights: 

• Due to macroeconomic factors like the recent government shutdown and rising prices, consumers are entering the holiday season cautiously, delaying the traditional early shopping surge.
• Spending priorities have shifted, with consumers consistently favoring essential purchases and tangible goods over discretionary items and experiences. This is reflected in minimal 0.2% year-over-year growth in discretionary spending and an overall 1.4% decline in real buying power.

The holiday season always brings excitement — and a lot of spending. But 2025 is shaping up to be a bit different. For November's Market Pulse webinar, Maria Urtubey, Senior Advisor at Equifax, was joined by Dr. Robert Wescott, President of Wescott Strategic Advisors, and Darryl Tyndorf, Director of Economic & Analytic Insights at Fiserv, as they discussed the latest economic, consumer credit, and holiday spending trends.

Below, we break down the six key takeaways from November’s webinar as well as the overall outlook for the rest of the year.

1. Uncertainty is the word of the year.

Experts say 2025 is full of “uncertainty.” With the longest government shutdown in U.S. history recently ending, many consumers are unsure about their finances. This hesitation affects when and how people start spending for the holidays.

Traditionally, the holiday shopping rush kicks off around Thanksgiving. Lately, October has become the unofficial starting point — but this year, the shutdown slowed that early activity.

2. Consumers are focusing on essentials.

Households, especially lower- and middle-income families, are prioritizing essential spending like groceries, basic retail, and necessities. Discretionary spending — like dining out, leisure activities, and nonessential shopping — is being limited.

• Retail sales overall grew 0.7% year-over-year in October 2025.

• When excluding volatile categories like vehicles and gasoline, growth jumps to 2.6%, showing that essentials and core retail categories remain strong.

• Restaurant spending, a key measure of discretionary spending, grew just 0.1%, the slowest pace this year.

In short, people are shopping, but mostly for what they need, not just what they want.

3. Rising prices still matter.

Although sales look positive in nominal terms (the raw numbers), other numbers tell a different story. When adjusting for ithe recent increase in prices, overall consumer spending is down about 1.4% compared to last year, suggesting that the real buying power of households is under pressure. Ultimately, small businesses are feeling these effects most.

4. Discretionary spending is down; essentials are up.

Historically, holidays drive big emotional and discretionary purchases, thanks to gift-giving, special events, and the “fear of missing out” on deals. But in recent years, consumer patterns have shifted:

• Since October 2023, spending on essentials has been consistently higher than on discretionary items.

• As of late 2025, discretionary spending is barely growing — just 0.2% year-over-year.

These trends show households are exercising caution heading into the holiday season.

5. Consumers are prioritizing goods over experiences.

Before, people spent more on experiences like travel, dining, or entertainment. Now, goods are seeing stronger demand:

• This trend could partly be due to concerns about prices. People may want to buy tangible items before costs rise further.

• Experiences are still important, but goods are leading the spending mix this year.

6. Government shutdowns affect the timing of holiday spending.

Looking at historical shutdowns, experts note that

• Shutdowns delay the early holiday shopping surge.

• When government employees return to work, there’s usually a bump in spending in November.

• December may see a slowdown as consumers adjust their budgets, followed by a typical reset in January.

High-income households tend to recover and spend more quickly, while lower- and middle-income families remain more cautious.

Overall Outlook for 2025

Putting it all together, the overall story is: 

• Consumers are entering the holidays cautiously.

• Essentials are being prioritized over discretionary items.

• Goods are in higher demand than experiences.

• Government and macroeconomic factors could cause fluctuations, especially in November and December.

The takeaway? Retailers and shoppers alike should brace for a holiday season that is steady but cautious. Planning early, offering smart deals on essentials, and staying flexible with budgets will be key.

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We hope you will join us for our December 2025 Market Pulse webinar, taking place on Thursday, December 4, 2025, where our talented and dynamic panel will discuss how AI could shape 2026 and beyond. To ask questions in real time and gain deeper insights before anyone else, you have to be there. Don’t miss it!

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Source:

Equifax, November 2025 Market Pulse Webinar