US holiday sales growth slows sharply

US holiday sales growth slows sharply

US holiday sales growth is projected to slow sharply this season amid economic pressures.

Holiday retail sales in the United States are forecast to increase between 2.9 % and 3.4 % from November 2025 through January 2026 — the slowest pace since the pandemic, according to Deloitte. Last year’s growth stood at 4.2 %, with total spending reaching approximately $1.57 trillion.

This season, Deloitte estimates sales will rise to between $1.61 trillion and $1.62 trillion, based on data from the U.S. Commerce Department and the Bureau of Economic Analysis. The report points to ongoing inflation, tariff concerns, and consumer caution as contributing factors.

Online sales are expected to remain strong, growing between 7 % and 9 %, in line with last year’s 8.4 % increase. In-store sales are forecast to rise by just 2 % to 2.2 %, down from 3.4 % growth in the previous year.

“Consumers may be front loading purchases again, especially if they consider tariffs and other inflationary costs,” said Brian McCarthy, partner at Deloitte. “Inflation itself pushes the price of items a bit higher, so that’ll manifest itself in a bit of an increase in overall holiday spend.”

Separate research from PwC indicates further signs of restraint. Average planned holiday spending per consumer is set to fall by 5.3 % to $1,552 — the sharpest drop since 2020. Gen Z consumers are leading the pullback, cutting gift budgets by 23 %.

Retailers have responded with mixed signals. Walmart and Macy’s recently raised full-year expectations following a stronger-than-expected summer, while toymaker Mattel lowered its outlook heading into the peak trading period.

With economic pressures continuing to weigh on sentiment, this year’s holiday season is expected to deliver subdued returns — despite solid demand for online and experience-based spending.