A retail sales outlook from ICSC anticipates growth of 3.5% to 4% during the holiday season that will bring the total expected spend to more than $1.7 trillion.
The uncertain economic environment hasn’t significantly dampened the enthusiasm of the majority of consumers regarding the upcoming holidays, with 65% of those responding to the survey agreeing that it’s more important than ever to embrace festive traditions.
As to destination, 92% of shoppers plan to spend in a physical store, with younger consumers being the most enthusiastic. Still, omnichannel shopping figures in, with 52% of consumers indicating they plan to take advantage of buy online, pick up in store options. Discount department stores, at 63%, and traditional department stores, at 29%, remain the most popular retail channels for holiday shopping. At the same time, 80% of survey respondents indicated that they are open to visiting new stores or trying new brands, according to ICSC.
Gift cards continue to be the top items on shopping lists this holiday season, with 64% of respondents planning to buy them, up six percentage points from 2024. As 63% of respondents noted, giving gift cards enables them to stick to their budgets and avoid higher prices on individual items. Apparel, at 55%, toys and games, at 54%, and food and beverages, at 43%, rounded out the top categories consumers intend to tap.
Tariffs are a factor shaping consumer attitudes toward shopping as consumers approach the holiday season, with 71% saying they plan to be more selective when making seasonal purchases based on price increases they attribute to duties, ICSC maintained. Along those lines, 63% of consumers indicated that they would avoid purchasing from retailers that significantly raise prices.
Shoppers plan to use a variety of tactics to keep spending down, with 64% expecting to spend more time searching out deals this year. Two-thirds of shoppers said that the search for discounts or exclusive offers will encourage them to take more store trips than they have in the past. As they search, 32% plan to use AI tools to facilitate holiday shopping and to come up with gift ideas, an increase from 25% in 2024.
One in three consumers responding to the survey said they plan to spend more on experiences this holiday season compared to last year. Respondents who plan to gift activities such as movies and events increased by five percentage points to 21% year over year.
“Despite economic concerns, our survey shows that consumers are committed to their holiday traditions and plan to shop,” said ICSC president and CEO, Tom McGee, in announcing the survey results. “Our forecast reflects that resilience, but our data also signals a selective shop, putting pressure on retailers to connect in new ways and offer memorable shopping experiences that entice them to spend. It’s clear from our research that economic factors aren’t only shaping consumer sentiment, but also directly influencing where and how consumers shop. Convenience, competitive pricing and attentive service are table stakes in this environment.”
