Consumers will likely spend more this holiday season—but are they buying more?

As consumers craft their holiday budgets (and check them twice) this year, many are upping their planned spend.

The National Retail Federation (NRF) released a headline-making prediction earlier this month, anticipating holiday retail sales would jump 3.7%–4.2% and exceed $1 trillion for the first time ever. Consumers plan to spend $890.49 per person on average this year—the second-highest amount in the NRF survey’s 23 years. NRF President and CEO Matthew Shay said in a statement that while shoppers “may be cautious in sentiment,” the group is “bullish about the holiday shopping season."

Other analysts shared similar predictions that, while in many cases represent a slight deceleration in spending, still indicate sales upticks ranging from around 3%–5%.

But these predictions come in tandem with rising prices, and aren’t too far off the YoY inflation rate of 3%, as reported by the Bureau of Labor Statistics last month—so that higher spend doesn’t automatically equate to a bigger pile of gifts under the tree.

“One of the things that consumers are clearly saying to us is price increase expectations are very high, so just because consumers expect to spend more doesn’t mean they’re going to necessarily buy more,” Chad Lusk, managing director in Alvarez & Marsal’s Consumer and Retail Group, told Retail Brew.

Speaking volumes: This year, retail volumes have seen “very little growth,” David Tinsley, senior economist at Bank of America Institute, said. However, dollars spent per household were up 2% in October compared to January. That increase could be attributed to larger basket sizes or general trading up in purchases, but “a reasonable hypothesis is that some of that is price pressures, and particularly around tariffs,” he said.

Lusk echoed the yearlong sentiment of rising sales and declining volumes in retail, noting many consumers are simply cutting back on volumes to save $$.

“Ten percent [of consumers] say they’re snacking less because they have less money to spend,” Lusk said. “Of those looking to reduce spend in beauty, a third of them are saying that they’re just going to buy less things. And that would translate to holiday items as well.”

An Alvarez & Marsal survey found 60% of consumers believe tariffs are responsible for a 10%+ increase in prices, Lusk said, which could affect how much consumers say they’re planning to spend this holiday season.

For its holiday outlook, Bank of America examines categories including general merchandise, electronics, clothing, and jewelry, where 20% of annual spend occurs in the months of November and December. Those categories are “very tariffed areas,” Tinsley noted, and have seen a 5.7% rise in spending through October.

“There’s probably in holiday spending, a bit of volume growth, but there is also quite a lot [that] is just essentially price inflation,” he said. S&P Global and EY-Parthenon similarly noted that retail sales bumps will be largely driven by price this holiday. This is a notable shift from the landscape last year, before then-President-elect Trump’s tariffs were enacted, when volume growth drove 85% of the 4.2% YoY rise in holiday retail sales, with 15% from price increases, EY-Parthenon noted.

Spending and transactions are likely to differ between income groups. Tinsley said Bank of America Institute found higher-income households upped their spend 2.7% through October, while lower-income households’ spend increased just 0.7%. Lusk said Alvarez & Marsal recently found that higher-income consumers are dropping their spend in essentials categories, stretching their wallets to spend in holiday categories like jewelry, electronics, and apparel.

While lower-income households have pulled back on clothing spend, Tinsley hypothesized they could be shifting that spend to general merchandise, which has seen an uptick in spending amid the cohort and where clothing is most often sold at a lower price point. When it comes to holidays, this essentially means that “some lower-income consumers are withdrawing from spending in some categories, more or less entirely,” Tinsley said.

Sale away: Underwhelming volumes likely won’t come as a surprise to retailers. Lusk noted retailers’ orders for the holiday largely reflect expectations of volumes that are flat to 1% down. Circana chief retail advisor Marshal Cohen told Bloomberg earlier this month that many aren’t ordering as much this season so they aren’t left with overstock.

As retailers near the holiday season’s biggest shopping weekend, tariffs have hit some brands like Therabody hard enough that they plan to discount products less than last year, a risky move given the weekend’s importance in driving traffic and sales, per Bloomberg. For those that do run discounts, Lusk said, promotional activity around Black Friday and Cyber Monday could revolve more around “basket-building” deals—bundled products, or a percentage off a certain spend threshold, rather than a blanket percentage off the total—to “provide incentives for consumers to buy more.”