A seasonal remix: Value, meaning and generational shifts

Retail is facing a reality check, with cost concerns front and center. According to PwC’s 2025 Holiday Outlook survey, 84% of consumers say they expect to cut back in general over the next six months, especially on dining out (52%), clothing (36%) and big-ticket items (32%). During the holiday season, specifically, 53% say that general price increases will likely affect their spending decisions this year.  

Even with expectations of spending slightly less this holiday season (US$1,552 per person on average, down 5% from 2024), consumers remain committed to preserving cherished traditions. This marks the first noteworthy dip since the pandemic in 2020, but holiday outlays are still relatively substantial. The biggest adjustment is in gift spending, which is down 11% to an average of $721 — compared with $814 in 2024 — while travel and entertainment are holding steady with 1% increases. 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.

Consumers concerned about tariffs, whether because of higher prices or limited availability, are tightening their wallets more than others. On gifts, they expect to spend 10% less — $690 compared with $756 for those who don’t express concern. And the restraint doesn’t stop there: 90 percent of tariff-concerned shoppers say they’re cutting back overall, versus 75 percent of everyone else. 

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. 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. 

Beneath the topline dip in holiday spend lies a deeper shift: Not all consumers are behaving the same way. Gen Z is cutting back more sharply than other groups, while baby boomers plan to increase their spend and millennials hold steady — a reflection of shifting financial pressures.   

Gen Z is pulling back the most of any group, saying they plan to slash holiday budgets by 23%. This marks a sharp reversal from 2024, when Gen Z’s holiday budgets surged 37% year over year, highlighting how quickly spending patterns can swing in response to shifting economic realities. Likely due to today’s tougher job market combined with rising fixed costs from major life changes and limited savings, 25% of Gen Z say their financial situation is worse than it was 12 months ago, compared to 17% who said the same in 2024.    

Among millennials, expected holiday spending is nearly flat YoY, down just 1%, 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% compared to 2024. 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% of its smaller budget toward self-gifting. Meanwhile, millennials and boomers are focused on others, allocating 62% and 67% of their spend, respectively, to family gifts. 

Interestingly, 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% are opting for resale and upcycled products, and 1 in 3 say they’re cutting consumption to reduce environmental impact. In addition, 34% of Gen Z (versus 27% overall) say sustainability or health and wellness are top factors they consider when making holiday purchases, and more members of this generation reads labels before purchasing food than other segments (29% versus 24% overall). Traditional drivers like price (49%), free shipping (42%) and promotions (38%) still influence their purchasing decisions as well.  

 In addition to the generational divide, other demographics like location and family status play a role in consumer behavior. Households with children are expected to spend more than twice as much as those without. And consumers in the Northeast and West are outspending the national average, pointing to regional variation. 

Across generations, value is the priority this season, with 78% of consumers seeking less expensive alternatives and 65% anticipating deeper, post-holiday discounts. Already, over the past year, internet searches for “discount” and “coupon code” have climbed by 11%. Trade-offs are likely to show up in quiet, thoughtful gift adjustments this holiday season and more modest at-home gatherings.  

Many consumers are choosing gift cards as a way to stick to their budgets and preserve gift-giving norms: Fifty-two percent of survey respondents say they plan to give gift cards to friends and 47% to family members. A $100 gift card still signals generosity, even if it buys less than it did a year ago. The popularity of gift cards also drives more people into stores and restaurants, suggesting a late December and early January spending bump when cards get redeemed — and people also often spend more than the card’s value once they’re shopping. 

The hunt for value is also increasingly powered by technology. Gen Z, in particular, is already blending channels to shop smarter: These consumers now use social media as often as search engines to discover gift ideas (43% for both), creating more touchpoints for retailers to connect. About 15% of Gen Z and millennials also say they expect to use AI to find gift ideas, and 76% of millennials say they’re likely to use AI for travel recommendations. Overall, however, 68% say they’re likely to use AI for comparing flights, and an even lower number (57%) say they'd be likely to use it for booking travel. This finding signals that AI-enabled recommendations are becoming a larger part of how consumers discover products and plan, but using AI for purchases could be further away.  

When something goes wrong, shoppers still want to talk with a real person. For baby boomers, this often means picking up the phone (82% of this group say it’s their go-to choice) or going to talk to a customer service representative in person (60%). Only 36% use email. And across all generations, phone support remains the top service channel, used by 64% for low-value issues and 70% for high-value ones, followed by live chat. 

For the first time, holiday gift shopping is nearing channel parity, with 51% of consumers planning to complete their purchases through online marketplaces (e.g., Amazon, eBay, Etsy) and 53% shopping in person. Nearly half say they’re drawn into a store to interact with products directly (48%), while promotions (38%) and the holiday atmosphere (25%) also pull them in.  

Payment choices are changing, too. Credit card use has climbed sharply, with 52% saying it’s among their top three payment methods (up from 40% last year). Cash has surged to 48%, potentially to avoid fees or stick to budgets (up from 41% in 2024.) Gift cards and prepaid cards are also gaining traction, with 27% of shoppers saying these cards are a preferred payment method, up 14% from last year. Among digital payment options, PayPal has grown steadily, now ranking in the top three for 27% of shoppers (up from 22% in 2024), while a smaller share (9%) opts for buy now, pay later (BNPL) platforms. Together, these shifts suggest that shoppers are selecting payment tools that can help them manage budgets. 

Meanwhile, fulfillment choices are diversifying. While 70% of all shoppers prefer home delivery, 39% say they'll buy online and pick up in store. Same-day delivery is most popular among Gen Z and millennials, with about 30% of each group saying that’s their preferred option for receiving items when shopping online.  

This year’s holiday shopping calendar is notably tighter than usual, with Thanksgiving, Black Friday and Cyber Monday arriving late (November 27-December 1), which could put spending under time pressure. According to our survey, 39% of total planned holiday gift spending will happen in the five-day period between Thanksgiving and Cyber Monday. Perhaps more importantly, almost 80% of holiday gift budgets will have been spent by the end of Cyber Monday.   

In a season shaped by cost pressures, many consumers are doubling down on what matters most — food, family and familiar rituals. Almost three-quarters (72%) plan to gather over a home-cooked meal this year, pointing to a return to tradition amid economic uncertainty. Those who typically have a traditional home-cooked meal are more likely to cite cost-savings (39%) and family or cultural tradition (56%), as well as the enjoyment of cooking (44%) as the factors that drive this choice. And people expect to spend money on it: 45% of respondents say they expect to spend more on grocery items for celebrations than last year. That rise, however, is likely driven at least in part by inflation and tariffs — not just bigger baskets.  

Food is also emerging as one of the most resilient gift categories this year. “Consumables” landed in the top five gifts on shopping lists this year, with 26% going for family, 28% for friends and 23% for themselves. Retailers can lean into this finding, offering more in-store promotions and pre-assembled bundles to meet demand.   

Unlike apparel or electronics, food delivers what many consumers are seeking this year: affordability, generosity and a sense of personal care — without adding clutter to the home.  And the appeal spans generations, with more consumers focused on food as part of their health and wellness goals. In terms of generational differences, Gen Z and millennials are gravitating toward wellness-forward options (such as low-sugar treats, functional beverages and artisanal pantry goods), while baby boomers tend to prefer traditional indulgences. 

Travel plans remain steady overall compared to last year, with 44% of US consumers expecting to hit the road. This overall stability reflects a shift from pandemic-era hesitation to a new normal shaped largely by cost. The primary motivation for traveling? Visiting family and friends — named by 48% of travelers. Younger generations are more likely to hit the road this holiday season, probably to stay with family, blending cost savings with the chance to reconnect. That said, Gen Z is pulling back more than others: just 55% plan to travel in 2025, down from 61% last year. For those not traveling, about half (49%) say they prefer to celebrate at home and 43% cite cost concerns. This rises to 50% for Gen Z respondents who say they’re not traveling. 

This year's survey points to a shifting consumer landscape — shaped by caution, complexity and a desire for connection. Shoppers say they’ll cut back, but behavior tells a more layered story. Most still plan to celebrate, give and gather, but they plan to do it more deliberately. Gift cards, consumables and shared experiences are gaining ground for their value, flexibility and emotional resonance. But the common threads stop there. Gen Z, baby boomers and households with children are making different choices, for different reasons.   

For retailers, one-size-fits-all strategies no longer apply. The opportunity isn’t to push more. It’s to meet people where they are with precision. Brands that listen closely, segment sharply and respond in real time can be better positioned for the season and to stay in sync with customers long after the holidays end.