The holidays may be the most wonderful time of the year, but in 2025, many shoppers are entering the season with their budgets top of mind. Economic pressures — from inflation to new tariffs — are weighing heavily on consumers, influencing not only how much they spend but how and when they shop.
According to a recent RetailMeNot survey of 1,100 US shoppers, nearly 8 in 10 (78%) shoppers feel economic strain and say economic factors are impacting their holiday plans — from travel and gifting to overall celebrations.
- 48% say their plans are significantly affected
- 30% say they’re somewhat affected
- Just 22% report little to no impact
The financial squeeze is especially pronounced among younger generations:
- Millennials feel it most acutely, with 61% saying their plans are significantly impacted.
Gen Z is also feeling the pinch — though to a slightly lesser degree — with 41% saying their plans are significantly affected and another 43% somewhat impacted.
Budgets Are Tight, But Spending Isn’t Stopping
Despite the financial headwinds, shoppers aren’t abandoning the spirit of giving. Instead, they’re getting strategic.
- 35% of consumers plan to spend more than last year, while
- 41% plan to spend about the same, and
- 24% expect to spend less.
That said, few are willing to pay full price. Among those shopping for gifts, 72% say they are unlikely or only somewhat likely to buy at full price, signaling that sales and promotions will be key motivators this season.
Deal-Hunting and Smart Saving Strategies Take Center Stage
How are shoppers saving this year? By combining classic tactics with new tools:
- 65% will shop major sale events like Black Friday and Cyber Monday.
- 58% plan to use coupons or promo codes.
- 51% are relying on cash back or rewards programs, underscoring their growing importance in purchase decisions.
- 35% are trimming their gift lists, while
- 26% will opt for secondhand or resale items.
- And 12% are using buy now, pay later options like Klarna or Afterpay to spread out costs.
Among Millennials, BNPL usage rises to 19%, showing a higher comfort level with flexible payments.
Prices and Tariffs Remain the Top Holiday Stressors
Inflation and tariffs continue to loom large over holiday planning. Consumers’ top stressors this season include:
- Inflation-driven higher prices (53%)
- Tariff-related fees (45%)
- Overspending worries (36%)
- Shipping delays (35%)
- Trouble finding discounts or promo codes (33%)
Tariffs, in particular, are influencing behavior: 40% of consumers say they’d switch brands if tariffs increase prices, while others plan to shop earlier (31%) or shift to domestic retailers (30%) to avoid added costs.
The Rise of AI-Powered Holiday Shopping
As shoppers look for smarter ways to stretch their dollars, many (52%) are turning to artificial intelligence for help — though trust levels vary.
- 25% say they fully trust AI to find the best deals and gift ideas.
- 27% somewhat trust it, using it as a starting point but double-checking results.
- Meanwhile, 32% remain skeptical or distrustful, preferring expert recommendations or personal research.
Younger consumers are leading the way:
- 36% of Gen Z somewhat trust AI for shopping help, and
- 19% already plan to use AI tools to build their gift lists — up from 13% earlier this year.
Millennials show even stronger adoption, with 36% saying they fully trust AI and 34% using it as a helpful guide.
Consumers Are Watching Their Wallets
In the first part of our Holiday Consumer Report, we saw that shoppers are budgeting more intentionally than ever:
- 58% are setting a holiday budget, and
- 1 in 4 (26%) say they’re sticking to it strictly.
- The average planned spend: $913 total — $611 on gifts for others and $302 on themselves.
And while shoppers are still finding ways to indulge, value clearly drives their behavior. Eight in ten (80%) say cash back offers influence their shopping decisions — with more than one-third (36%) saying these deals strongly determine where and how they shop.
Between inflation, tariffs, and lingering concerns about overspending, 2025 holiday shoppers are choosing strategy over spontaneity. They’re comparison-shopping, leaning on rewards programs, and embracing AI tools — all in pursuit of the best value.
Holiday cheer may look a little more calculated this year, but it’s still going strong — fueled by smart shopping, digital tools, and a determination to make the season bright without breaking the bank.
The post Inflation, Tariffs, and Tight Budgets: How Economic Factors Are Shaping the 2025 Holiday Season appeared first on The Real Deal by RetailMeNot.
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