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While early holiday forecasts indicated sales would rise, more recent research is telling a different story. Two holiday forecasts released this month suggest consumer spending for the season may decline, with budgets being stretched between a desire to celebrate and the pressures of the U.S. economy. Fourth-quarter holiday spend is expected to range from a 1% decline year over year to a 2.5% increase, according to Circana data. The survey of over 3,500 U.S. shoppers found budgets are expected to be $779, compared to $796 in 2025, per the study. Separately, Simon-Kucher is projecting a 5.5% year-over-year decline in spend for the holiday period, marking a budget average of $1,018, according to a study of 1,500 U.S. adult consumers. So what’s contributing to the more cautious outlooks? Shoppers get more ‘purposeful’ about spending Retailers and consumers are on edge as the festivities ramp up, which has resulted in more value-conscious shopping behaviors. “Consumers are not abandoning holiday spending, they’re becoming increasingly purposeful about where and how they spend,” Kiara Barrett, head of global thought leadership at Circana, said in a statement. “Throughout 2026, we’ve seen shoppers shift toward a new definition of value, one that extends beyond price alone. While affordability remains important, consumers continue to prioritize purchases that create meaningful moments, strengthen personal connections, improve everyday life, or simply deliver a sense of joy.” Higher prices across the board are changing some spending patterns. About 77% of consumers say inflation has changed their shopping behaviors, per the Simon-Kucher data. Meanwhile, only 22% think advertised discounts reflect true savings, which marks a significant drop from 46% last year. Nearly 80% of shoppers are expecting higher prices on holiday purchases this year, according to Deloitte’s 2026 Holiday Retail Survey released last week. Deloitte — which polled 4,000 U.S. consumers — expects average household spend to increase 4% from last year to $1,654 for the holidays. Meanwhile, the National Retail Federation forecasts that holiday sales will increase 4.2%, reaching just over $1 trillion dollars during the November and December holiday season. “While overall outlook is positive, we do expect that the experience of individual households will vary significantly based on income levels and wealth, and exposure to higher everyday costs like gasoline and other household essentials,” NRF’s Chief Economist and Executive Director of Research Mark Mathews said on a media call about the forecast Thursday. “As we head into the holiday period, if gas prices remain higher, we do expect that this will have a larger impact on households at the lower end of the income spectrum. Now, despite inflationary pressure, we expect goods prices to run lower than headline inflation as retailers respond to a price-conscious consumer.” Shopping earlier is one way value-conscious consumers are looking to handle their budgets this season. Over half of consumers from the Circana data say they plan to begin holiday shopping before Thanksgiving, though Thanksgiving week remains a key deal event. Over 60% of consumers are shopping sooner this year to spread out those costs, per Simon-Kucher. Additionally, 22% of those surveyed by Deloitte said they plan to start shopping earlier than 2025 and 28% of holiday budgets are expected to be spent by the end of October. While some other research from ICSC and Bain & Company suggests retail spend will increase for the holidays this year, consumers have been vocal about their financial stress across the research. Inflation will account for more than half of the nominal rise in sales, per Bain & Company. Additionally, 49% of respondents from ICSC’s study are worried about affording holiday gifts this year and half said debt will weigh on holiday budgets.
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