A Consumer Sentiment Survey from business services provider EY-Parthenon indicated that consumers will substantially boost holiday retail sales but are funding seasonal purchases by cutting back on certain discretionary spending while focusing on promotions and sales.
The survey indicates that 42% of consumers are more stressed about affording holiday gifts than they were last year. Still, 62% expect to spend roughly the same amount or more on holiday gifts this year, and 81% plan to buy gifts for about the same number of people or more than last year. A key strategy consumers are using to stretch holiday budgets is waiting for promotions and sales before spending, a consideration for 27% if they encounter price increases.
As they decide how to spend, 51% of consumers said they plan to prioritize physical gifts this season, with 21% intending to give experiences. EY-Parthenon noted that this preference reflects broader pullbacks across restaurants, entertainment, personal electronics and travel.
Despite spending concerns, 41% of consumers plan to purchase a holiday gift for themselves this year, and younger consumers aged 19-34 are most likely to do so, at 53%. As consumers look for affordable ways to celebrate and reward themselves, smaller discretionary purchases remain an accessible form of indulgence.
Overall, EY-Parthenon predicts a 5.2% increase in U.S. holiday retail sales to $1.08 trillion during the November/December shopping season, marking the strongest holiday sales growth since 2021. Solid household finances, low unemployment and accumulated wealth continue to support spending even as consumers remain dissatisfied with the cost of living. This tension between economic caution and spending resilience is a critical consideration for the 2026 holiday season, EY-Parthenon pointed out.
As they consider their plans as the year winds down, 14% of consumers said they expect to carry holiday-related debt into 2027, with 69% of those respondents thinking they would pay off the debt by spring 2027.
“Brands and retailers have an opportunity to help shoppers maintain holiday traditions while navigating ongoing cost pressures,” said Will Auchincloss, EY-Parthenon Americas retail sector leader, in announcing the survey results. “Retailers can meet those expectations by emphasizing value, offering assortments across a range of accessible price points and bringing promotional activity forward to engage shoppers earlier in the season.”
