American households are planning for a significantly more frugal holiday season in 2025, but the restraint is far from uniform. According to the JLL Holiday Shopping Report, the average consumer budget is set to drop by 10.2%, falling from $1,261 last year to $1,133 per person, driven primarily by cost concerns and a shift toward strategic spending.
While overall budgets are shrinking, the act of giving remains paramount. Consumers are prioritizing gifts, keeping that portion of their spending virtually unchanged at $580. This means that gifts now make up over half of the total anticipated spend, signaling that core holiday traditions endure even as discretionary budgets for dining out, décor, and entertainment tighten.
This careful approach reflects the enduring pressure of elevated prices, with years of inflation weighing heavily on consumer confidence. The proportion of shoppers who say inflation will impact their spending fell a mere 10 percentage points to 32.6%, underscoring that bargain-hunting is now a deeply embedded part of American shopping culture.
The affluent vs. the budget-conscious divide
The JLL report reveals a stark economic divergence, creating a “split-spending” holiday where affluent households are essentially carrying the season’s growth while lower-income shoppers pull back dramatically.
Affluent households (earning over $150,000) are bucking the national trend, increasing their planned holiday spend by 26% to $1,963. These shoppers are expanding their budgets across the board, splurging on gifts, premium food, décor and experiences.
Conversely, lower-income households (under $50,000) are planning the steepest cuts, reducing their average budget by a massive 24% to just $699. This group is highly price-sensitive, with many intending to buy for fewer people and waiting for major deals to stretch their limited funds. Middle-income shoppers ($50,000–$150,000) show more stability but are still cautious, trimming their budgets by 4.8% to $1,207.
Generational shifts in spending
Generational trends further emphasize the divergence:
- Younger Shoppers Pull Back: Both Gen Z ($1,039) and Millennials ($1,004) are planning for reduced spending compared to last year, focusing on essentials and deal days amid economic uncertainty.
- Gen X Powers Ahead: Gen X (45–60) is the only generation to actually increase its spending, raising its average budget to $1,318. This group is dedicated to traditional holiday investing in gifts, décor, and experiences.
The new dynamics of deal hunting
The cost-conscious environment is reshaping when and where Americans shop, with value over vibes dictating decisions for most.
71% of shoppers cite stores offering low prices or sales as their top factor when choosing where to shop, cementing its dominance over experiential features like holiday ambiance (which appeals to only 13% of shoppers).
Timing and channel strategy
Consumers are becoming more strategic, with a notable shift toward later shopping start dates. Only 27.7% of shoppers started before October, a significant decline from last year. Shoppers are waiting for the major promotional periods, with Black Friday weekend maintaining its status as a critical shopping catalyst.
The retail landscape confirms that omnichannel shopping is the established norm, with over 83% of shoppers planning to interact with a physical store in some capacity. However, efficiency is key: nearly two-thirds of shoppers plan to complete their lists with five or fewer retail stops, favoring focused trips over marathon shopping sprees.
The pursuit of value has also propelled mass merchandisers back to the top spot as the most popular shopping destination, capturing 62.2% of holiday shoppers’ plans. The retail triumvirate of Amazon, Walmart, and Target maintains its rock-solid dominance as the top three retailers for an eighth consecutive year.
Experiences and gifts: quality over quantity
While budgets for non-gift festivities are down, experiences still play a role, particularly for those with means. A whopping 93% of shoppers plan to enjoy at least one experience, with dining out remaining the most popular choice. However, participation in other events—like live entertainment and Santa visits—has seen modest declines, reflecting caution. Affluent shoppers, in contrast, will immerse themselves in fun, planning for an average of 3.7 experiences.
In gift-buying, there’s a trend toward practicality:
- Gift Cards are surging in popularity, jumping to 43.4% of shoppers’ lists, reflecting a practical desire for flexibility.
- Electronics are seeing a notable dip as a gift choice, suggesting consumers are more cautious about expensive technology investments.
- Self-Gifting Takes a Backseat: A significant 25% of shoppers plan to forgo personal purchases entirely, up from 17.3% last year, reversing a recent trend of holiday self-indulgence.
Retail takeaways: The longer linger
For retailers, the key to success lies in two areas: maximizing value visibility and encouraging extended visits. The report highlights that shoppers who linger for over 90 minutes generate 79% more revenue ($1,416) than those who spend less than 30 minutes ($792).
This insight means operators must invest in creating comfortable, engaging retail environments—perhaps with phone charging stations, festive ambiance, and upgraded food and beverage options—to encourage customers to stay past the 90-minute spending sweet spot. By making the value proposition clear and the shopping experience enjoyable, retailers can counteract the overall budget restraint and capture the highly strategic holiday spender.
