Retail sales excluding autos will grow by 3.6% year over year during the Nov. 1 to Dec. 24 holiday shopping season, down from the 4.1% increase recorded in 2024, MEI said in a Thursday (Sept. 18) press release.
“In 2025, holiday shoppers will be searching for value amid broader economic uncertainty,” the release said. “Their decisions will be driven in part by the health of the labor market and by tariff-related price increases.”
In the labor market, the impact of a slowdown in hiring has been tempered by a low rate of firing, according to the release. Overall, the labor market continues to support consumer spending.
The trends in consumers’ incomes vary, with lower-paid workers seeing their wage growth moderate while high-income workers are benefiting from gains in the stock market, the release said.
The effect of tariffs on consumers is “a key uncertainty” because it is not yet known if retailer will absorb the cost to remain competitive or if they will pass the cost on to consumers, per the release.
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MEI also said in the release that eCommerce sales will increase 7.9% year over year, while in-store sales will rise 2.3% year-over-year.
It was reported Friday (Sept. 12) that the holiday shopping season got off to an early start as consumers sought to buy gifts before the price increases that they expected took effect.
Looking ahead, Deloitte said in its annual holiday retail forecast released Sept. 10 that the season’s retail sales are likely to increase between 2.9% and 3.4% this year after growing 4.2% in 2024.
“We expect this holiday season to demonstrate the resiliency of consumers as they continue to face economic uncertainty,” Natalie Martini, vice chair, Deloitte, and U.S. retail and consumer products leader, said in the report.
Bankrate said in its 2025 Holiday Spending Report issued Sept. 8 that 43% of holiday shoppers expect to spend about the same as last year, 30% expect to spend less and 27% expect to spend more.
PwC said in its Holiday Outlook 2025 released Sept. 3 that consumers expect their holiday spend to decline by 5% this year, marking the first drop since 2020.
“More broadly, 84% expect to cut back over the next six months, citing rising prices, new tariffs and the higher cost of living,” PwC said.
