Most U.S. consumers will be more selective in their holiday shopping this year as concerns about rising costs weigh on gift purchase choices, according to market research and analytics company Circana.
The Circana holiday intentions survey indicated that 81% of holiday shoppers expect higher prices due to tariffs. Nearly two-thirds (63%) of consumers surveyed said they will buy fewer gifts, spend less on the gifts they purchase, or select “off-brand” items because of rising food and grocery costs.
“Purchase prioritization will be front and center for consumers this holiday shopping season,” said Marshal Cohen, chief retail advisor for Circana. “Holiday shoppers will be making more thoughtful and deliberate choices based on their budget and the value they get from the purchase, leaving less room for the impulse spending that is critical to holiday season growth.”
Circana reported the top types of planned physical holiday gifts this year, coming in about the same as 2024, are clothing and accessories (56%), technology and electronics (38%), beauty (33%), entertainment (30%), home (29%) and toys (28%).
Select home products and entertainment may see a year-over-year boost in spending based on early consumer intentions, with an average planned spend of $378 and $218, respectively, according to Circana. Beauty is the one segment for which consumers plan to buy more and spend more than during the 2024 holiday, with an average planned spend of $247.
More than half (54%) of consumers plan to buy for kids this holiday season, and of those, only 31% plan to spend less on their kids, Circana noted. Among the half of consumers planning to buy gifts for their spouses or partners this year, 40% plan to spend less on them. Some 11% of holiday shoppers plan to buy gifts for pets this year, with 37% planning to scale back their splurge.
Cohen said, “Purchase prioritization, particularly at the holidays, is the result of weighing need and practicality with emotion and perceived value. It is in the gray area where that blend of considerations comes together that retailers and manufacturers can find their opportunity to capture the consumer’s attention if they can convey a benefit that surpasses price.”
