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Earlier this year, words like cautious, deliberate, and value defined the holiday season. But new data suggests that while shoppers still feel wary, they’re spending more than they planned to just a few months ago. When it comes to the holidays, people are willing to stretch their budgets, even if it means cutting back in January.
Holiday spend is trending up
According to PwC’s Holiday Sentiment Survey, conducted in October, the average projected gift spend is now $770, up from $721 in June when we conducted PwC's 2025 Holiday Outlook. That’s a 7% increase, marking a subtle but important shift. Consumer sentiment is evolving, and so are the trade-offs people are willing to make.
Digging into generational trends reveals even more nuance. Millennials are pulling back their expected gift spend (now $843, compared to $921 in June), and we see a similar trend among Gen X ($679, compared to $705 in June). That may be driven by parents balancing holiday priorities with rising costs. Meanwhile, baby boomers ($858, compared to $671 in June) and Gen Z ($622, compared to $586 in June) are planning to spend more. For Gen Z, this increase may reflect higher prices. For older generations, it may signal more financial stability, and a willingness to splurge on children and grandchildren.
From a broader economic perspective, discretionary spending seems to be stabilizing—and may even be edging up—heading into the holidays. PwC’s analysis shows a 3.2% year-over-year increase in Q4 spending, driven by stronger combined spending across October, November, and December. Average expected spend for the quarter is projected to rise from $7,591 to $7,834. This contrast is defining the 2025 holiday season: consumers said they planned to hold back, but their actual behavior since our Holiday Outlook survey suggests otherwise—a classic “say-do gap.”
The five-day frenzy is real: Deep deals are pulling shoppers in
Holiday shopping started earlier this year, with 29% of survey respondents planning to spend half their budget before Thanksgiving. But wallets aren’t empty yet: 64% of holiday budgets remained unspent at the end of October.
What are people planning to buy? Gift cards top the list (50%), hinting at a second spending wave in January as cards are redeemed. For retailers, this extends the holiday shopping season, which means keeping promotions running and inventory in stock. The “end of year” may now stretch into Q1—especially for those with strong digital and loyalty infrastructure.
What consumers are buying, where they’re discovering, and how they're paying
Despite new tech tools and shifting behaviors, consumers are leaning into familiar categories this season. Experiences, often cited in trend forecasts, seem to be lagging, but perhaps because travel and entertainment are often self-gifted. While people are willing to spend this season, they remain price sensitive. They’re also seeking value through gifts that they can get quickly and conveniently. Gift cards remain the most popular (50%), followed by apparel (39%), toys (37%), and consumables like food and beverages (34%). But what’s changing is how people discover these gifts and move from idea to purchase.
Discovery is increasingly digital, and deeply generational. Gen Z, in particular, is turning to social media for inspiration: 51% say it’s their go-to gift guide, making it the only generation where social media outpaces all other discovery channels and underscoring how rapidly the path from platform to purchase is shifting. But while inspiration may start on social, it often ends at checkout online or in-store. The journey from scroll to shelf is fluid, and retailers with strong omnichannel execution are best positioned to capture that demand.
Meanwhile, payment methods reflect a blend of familiar habits and evolving preferences. As observed in PwC’s Holiday Outlook, cash is making a comeback. Here too, we saw that trend continue, with more than 50% of respondents across generations saying they planned to use cash this holiday season. Baby boomers and Gen X also lean heavily on credit cards, while Gen Z favors debit and mobile payments—24% cite using Apple or Google Pay. Digital wallets and PayPal are also gaining traction across all generations, signaling a broader shift toward convenience and flexibility.
AI is emerging as a personal shopper
More than half of consumers (56%) now say they're using AI tools this season for price checks, trip planning, or writing messages. Among Gen Z and Millennials, usage jumps to 75%. Parents with kids under 18 are also heavy AI users, primarily leaning on it for budgeting and decisions.
The takeaway? AI is quickly becoming an embedded part of the shopping experience. It adds a layer of convenience that's going to play a growing role in the consumer journey.
People are spending more than they planned
Despite cautious sentiment and continued bargain hunting, consumer behavior shows that spending is strategic, tech-enabled, and well underway. In-store and online shopping traffic remains solid, and with gift card redemptions ahead, the season may exceed expectations.
What retailers should do now
- Watch behavior, not just headlines. Consumers say they’re cautious, but actual spend tells the full story.
- Orchestrate across generations. Young buyers expect fast social to shelf velocity. Older buyers stick to tradition. Success lies in serving both.
- Think in seasons, not spikes. If AI-driven planning starts in October, or earlier, next year’s holiday campaigns may need to move up.
The bottom line
Today’s consumers are complex: tech-savvy, emotionally driven, and shopping smarter than ever. They may say they’re cutting back, but they’re still spending. For retailers, the edge now isn’t just price or product. It’s pace. Staying relevant means keeping up with the speed of culture.
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