PwC: Average holiday spend set to drop 5% this year — biggest decline in five years

According to PwC’s 2025 Holiday Outlook survey, consumers expect their seasonal spending to decline on average by 5% from 2024 — the first notable drop since 2020. More broadly, 84% expect to cut back during the next six months, especially on dining out (52%), clothing (36%) and big-ticket items (32%), citing rising prices, new tariffs and the higher cost of living.

During the holiday season, specifically, 53% of consumers say that general price increases will likely affect their spending decisions this year.  Gen Z (ages 17 to 28) is pulling back the most of any group, with plans to slash holiday budgets by 23%, more than any other generation. This marks a sharp reversal from 2024, when Gen Z’s holiday budgets surged 37% year over year, highlighting how quickly spending patterns can swing in response to shifting economic realities, noted PwC.

PwC noted that its Holiday Outlook findings reflect sentiment captured in June, at a time where there was more uncertainty around tariffs, which have since been delayed or paused (and, as a result, might not have as great an impact on survey respondents’ estimated spending).

“Economic signals continue to shift and, between now and December, purchasing behavior could evolve in response,” the firm stated.

Holiday Calendar

This year’s holiday shopping calendar is notably tighter than usual, with Thanksgiving, Black Friday and Cyber Monday arriving late (Nov. 27 – Dec. 1), which could put spending under time pressure, PwC said.

According to the survey, 39% of total planned holiday gift spending will happen in the five-day period between Thanksgiving and Cyber Monday. Perhaps more importantly, almost 80% of holiday gift budgets will have been spent by the end of Cyber Monday.

Other findings from the PwC survey are below.

• Across generations, value is the priority this season, with 78% of consumers seeking less expensive alternatives and 65% anticipating deeper, post-holiday discounts. During the past year, internet searches for “discount” and “coupon code” have climbed by 11%. Trade-offs are likely to show up in quiet, thoughtful gift adjustments this holiday season and more modest at-home gatherings.
• For the first time, holiday gift shopping is nearing channel parity, with 51% of consumers planning to complete their purchases through online marketplaces and 53% shopping in person. Nearly half say they’re drawn into a store to interact with products directly (48%), while promotions (38%) and the holiday atmosphere (25%) also pull them in.
• Credit card use has climbed sharply, with 52% saying it’s among their top three payment methods (up from 40% last year) for holiday spending. Cash has surged to 48%, potentially to avoid fees or stick to budgets (up from 41% in 2024.) Debit cards remain the top choice, at 55%, up 1% from last year.
• Many consumers are choosing gift cards as a way to stick to their budgets and preserve gift-giving norms: Fifty-two percent of survey respondents say they plan to give gift cards to friends and 47% to family members.
• Consumers concerned about tariffs are tightening their wallets more than others. On gifts, they expect to spend 10% less — $690 compared with $756 for those who don’t express concern. Also, 90% of tariff-concerned shoppers say they’re cutting back overall, versus 75% of everyone else.