The holidays are an important time of year for consumers, retailers and lenders alike. Understanding current trends is useful as buyers and sellers prepare for the holiday season.
2024 was a big year for holiday spending. However, consumers are taking a different approach in 2025. This year, customers are being more cautious with their spending, partially due to tighter budgets for middle-income households. Since January 2021, the cumulative change in cost of spending for middle-income households has increased by 23.4% for all items.
Certain generations are feeling the pressure more than others. Gen Z faces the most difficult financial landscape; the Market Pulse Index for Gen Z reveals a 5% decrease in value over the past four years. For comparison, the average US population’s Market Pulse Index value decreased by 1% over the same time period.
With this context in mind, it makes sense that consumers are being more careful with holiday spending in 2025. New approaches, such as earlier shopping, have emerged as Americans navigate the upcoming holidays.
For lenders, it is important to prepare for an increase in credit and loan requests as the holidays grow closer. When it comes to retailers, implementing more personalized and data-driven marketing will be important in 2025, as 71% of consumers expect companies to offer personalized interactions.
With current consumers placing a greater emphasis on value and conscientious spending, lenders and retailers should study and adapt to holiday spending trends.
Source: Equifax