Holiday spending is expected to drop this year—led by sharpest decline from Gen Z

U.S. consumers, particularly Gen Z, are likely to spend significantly less on the holidays this year, according to a new PricewaterhouseCoopers survey.

For PwC’s 2025 Holiday Outlook, the consulting firm polled about 4,000 consumers nationwide between June and July, and found shoppers expect to spend 5.3% less than in 2024, or about $1,552 per person. It’s the first notable drop since 2020—when average spending fell 7.6%, to $1,187.

That’s not all. Some 84% of Americans expect to cut back over the next six months, particularly when it comes to eating out (52%), clothes (36%), and big-ticket items (32%)—as a result of rising prices and tariffs (especially on electronics, apparel, toys, food, and household staples)—and the overall high cost of living. More than half of those surveyed said increased prices will likely affect what they decide to purchase, making value a defining theme of the 2025 holiday season.

Gift spending is expected to take the biggest hit, down 11% to an average of $721, from $814 in 2024—while people continue to spend on travel and entertainment, at an increase of 1%.

Gen Z holiday spending expected to drop sharply

PwC expects the sharpest decline in shopping to come from Gen Zers, who say they expect to reduce their holiday spending by a whopping 23%, leaving retailers to compete over fewer dollars.

However, the good news for retailers is that millennials, Gen Xers, and baby boomers are expected to spend about the same as last year, possibly slightly more.

What shoppers are looking for this holiday season

More than a good deal, consumers are seeking value and brands they feel “get” them this holiday season.

As with all forecasts, it’s worth noting this survey took place in June and July, during a period of high uncertainty over tariffs, and that purchasing behavior could always change between now and December, along with the economic climate and outlook.