KPMG Consumer Pulse | Holiday 2025

Consumers are approaching the 2025 holiday season with a mix of optimism and caution—finding room for gifts, travel, and gatherings even as they manage tighter budgets and rising prices. They expect to spend 4.6 percent more than last year, but most say higher costs—rather than stronger finances—are driving the increase. That rising allocation is uneven, however: Higher-income households account for most of the expected gains, while lower incomes anticipate cutting back.

Inflation and tariffs continue to dominate concerns, with 8 in 10 shoppers anticipating additional price pressures. Cash is the most requested gift, self-spending is on track to climb by 20 percent, and travel is taking a larger share of budgets, with categories like toys and furniture facing cutbacks.

Cost pressures are setting the tone for the season. Seventy-nine percent of respondents believe tariffs will push prices higher, and 80 percent cite inflation as their top shopping concern. Consumers overall expect to spend an average of $847 this year (vs. $810 in 2024), but the gains are uneven: Households earning more than $200,000 plan a 9 percent hike, while those under $50,000 expect to cut back by 2 percent. Income trends add to the complexity. While 49 percent report earning more than last year, 48 percent say their income has fallen—and one in five describes that drop as 25 percent or more. In response, shoppers are recalibrating. Fifty-two percent are more actively seeking promotions, and half plan to buy less. Essentials such as groceries and personal care are absorbing a larger share of budgets, while discretionary spend is set to decline across the board.