A study from Coresight Research suggests that a rise in consumer sentiment from early spring can be seen as a sign that the holiday season may be a good one for retailers.
Consumer expectations around their ability and willingness to spend money in the 2025 holiday season have improved, according to Coresight. Intentions and sentiment have been climbing out of the trough experienced in March. As of May, consumers in the United States were more positive about their spending intentions and financial situation for the holiday season of 2025, compared to a net negative sentiment in March. Still, Coresight cautioned, the recent net positivity is only slight, and potential exists for it to return to negative territory should macroeconomic signals worsen.
As of midyear, retail demand has remained solid and consumer sentiment has improved. Consumers have proved resilience amid positive underlying signs emerging from the consumer economy, including employment, wage growth, overall inflation and gasoline prices.
Tariffs pressured consumer sentiment in March and April, but that had less of a bearing as of June’s end. Then, the stock market has been on a recovery trajectory. Yet, Coresight pointed out that negative tariff impacts on prices and availability have not been immediately apparent to consumers until now. If not yet evident, price increases and product shortages may become apparent as 2025 progresses, even with pauses or rollbacks in place. U.S. tariffs are higher on average than they were at the beginning of the year, and Washington is prepared to elevate tariffs again on August 1.
Where optimism is strongest is in high-income households, Coresight maintains, so any resurgence of inflation due to tariffs is likely to impact lower-income groups mostly. At the same time, income-tax gains from the One Big Beautiful Bill Act are set to provide more modest proportional gains for lower-income earners than those in higher-earning groups, while cuts to the Supplemental Nutrition Assistance Program and Medicaid are set to have the greatest effect on lower-income groups, as well.
Given the present evidence, Coresight opined that affluent consumers will drive holiday sales and suggested that retailers catering to a broader set of consumers should maintain flexibility in promotions, tiered pricing strategies and cross-channel fulfillment to capture both early-bird shoppers and budget-conscious consumers.
