U.S. holiday spending is projected to see its sharpest decline since the pandemic, driven by cautious spending among shoppers, especially Gen Z, due to economic uncertainty, according to a PricewaterhouseCoopers survey.
The survey, conducted between June and July with around 4,000 U.S. consumers, found that shoppers plan to spend an average of $1,552 per person, a 5.3% decrease from last year. This drop is the most significant since 2020, when average spending fell 7.6% to $1,187.
More broadly, 84% of consumers said they plan to reduce spending over the next six months, especially on dining out (52%), clothing (36%) and big-ticket items (32%), citing rising prices, new tariffs, and the increasing cost of living as key concerns.
“Consumers are approaching holiday purchases more deliberately, deciding what matters most, where to scale back and what feels worth the splurge,” PwC said.
Gift spending is seeing the largest decline, dropping 11% to an average of $721 from $814 in 2024, while spending on travel and entertainment remains stable, each rising by 1%.
Beneath the topline dip in holiday spend lies a deeper shift, with Gen Z cutting back more sharply than other groups. Gen Zs said they plan to slash holiday budgets by 23%, marking a sharp reversal from 2024, when Gen Zās holiday budgets surged 37% Y/Y. Baby boomers, meanwhile, plan to increase their spend and millennials hold steady.
Across generations, value is the priority this season, with 78% of consumers seeking less expensive alternatives and 65% anticipating deeper, post-holiday discounts.