Experts predict cautious consumers will slow their roll in 2025

A rough consensus is forming among experts that the 2025 holiday season could be a letdown compared to last year. But as usual, each prediction is rife with nuance about what’s driving consumers, and which products and categories will draw their dollars.

Here’s Retail Brew’s roundup of the highest-profile holiday forecasts:

Adobe Analytics

Data points: Looking exclusively at online sales, Adobe Analytics predicts a 5.3% increase this year. That’s down from an 8.6% gain in 2024.

Insights: The research firm found evidence that consumers are hungrier for deals than ever, with the five-day period including Thanksgiving, Black Friday, and Cyber Monday comprising 17.2% of sales, up from 6.3% last year. It expects retailers to hold steady on their discount rates, and for more shoppers to use buy now, pay later apps for their holiday shopping.

Mastercard Economics Institute

Data points: Using its own SpendingPulse data, Mastercard Economic Institute (MEI) is forecasting a 3.6% year over year increase in total US retail sales. That would be down from 4.1% in 2024.

Insights: MEI is expecting more of these gains to come from inflation, however, in part due to tariffs boosting costs. It’s also anticipating more gift card use this year, and a strong showing from tech-powered health and wellness products such as fitness trackers and gym equipment.

Recommendations: Due to a consumer preference for experiences, MEI noted that retailers may need to bundle products with “experiential elements” to attract customers.

Bain & Company

Data points: Bain & Company is forecasting a “below-average” 4% year over year increase in retail sales. That’s compared to a 10-year average of 5.2% and a 2024 increase of 4.5%.

Insights: In-store sales are on track to make a comeback this year, comprising approximately half of the estimated 4% gain; whereas in 2024, nonstore sales contributed the majority of the increase. Relatedly, nonstore sales growth is set to slow to 7%, down from 9%–10% over the past two years.

Recommendations: Focus on big sales events; stress value over pierce; ensure “warm, human experiences,” even as you employ new AI-powered technology; and use “timely, personalized ads.”

PricewaterhouseCoopers

Data points: In one of the bleaker forecasts of the season, PricewaterhouseCoopers (PwC) is predicting that sales will decrease 5% from 2024 in the first major decline since 2020.

Insights: The biggest contributors to this decline could be Gen Z shoppers, who plan on reducing their holiday budgets by 23%, per a Deloitte survey. Echoing Bain & Company, the research firm highlighted that online and in-store sales are nearing parity this year, with online holding a slight advantage at 51%.

Recommendations: Due to consumers feeling more cautious this year, PwC recommends retailers “look beyond price cuts—and to understand how life stage, values, and emotions drive spending.”

Deloitte

Data points: Deloitte is forecasting that retail sales will increase between 2.9% and 3.4%, compared to 4.2% in the same period last year—even as it expects disposable personal income (DPI) to grow 3.1%–5.4% over the holiday period, giving consumers a boost.

Insights: In another survey, Deloitte found that average planned holiday spend dropped 10% year over year to $1,595. With many blaming a higher cost of living, nearly a third of shoppers anticipate spending less on retail categories: Spending on the category is set to decline nearly 14%, while spending on gifts is expected to decline 6%.

For a look at what experts were predicting ahead of the 2024 holiday season, check out Retail Brew’s previous roundup.