Holiday spending falls back to 2024 levels as shoppers tighten budgets

TikTok Shop LIVE is becoming a fresh holiday shopping channel for retailers.

BOSTON — Holiday retail sales expectations are mixed. Americans expect to spend 5.5% less this season, or an average of $1,018, according to Simon-Kucher’s 8th Annual Holiday Shopping Study, putting spending back in line with 2024 levels. With household budgets under pressure, any revenue growth for retailers is likely to come from higher prices rather than more purchases, meaning they will be competing for every dollar.

“Holiday budgets are being reset, not abandoned,” said Shikha Jain, Partner and Head of Consumer North America at Simon-Kucher. “High fuel costs and inflation have made consumers far more focused on value and deals. For lower and middle-income households, financial fragility is growing. They’re choosing between record debt and everyday essentials, and holiday gifts add more to the financial pressure.”

Higher-income households remain the main spending support, but many shoppers are pulling back, using savings and buying gifts more deliberately. They are shopping earlier, cutting discretionary spending, and using holiday promotions to cover basic needs. Deep discounts of 40% are no longer the norm as retailers work to protect both revenue and profit. Shoppers now commonly accept savings in the 15% to 25% range. Across categories, consumers are changing when they shop, what they buy, and which trade-offs they are willing to make.

Technology is reshaping the gift-buying experience this season. AI is increasingly acting as a shopping assistant, helping consumers find value-driven deals, compare products, and make more confident choices. TikTok Shop LIVE offers brands a new storefront with real-time demonstrations and urgent, limited-time offers. Nearly 60% of TikTok Shop users say they are likely to shop LIVE during the holidays, making it an important driver of seasonal discovery and direct-to-consumer sales.

Key trends observed

Consumers are cutting costs and changing how they shop

• 77% say inflation has changed their shopping behavior.
• 37% are relying on promotions for non-essential purchases.
• 62% are shopping earlier to spread out costs.

Consumers spend on what matters

• 56% will spend extra to maintain holiday traditions.
• 61% of Millennials say they enjoy flash sales.
• At 72%, trips and appliances are among the largest holiday spending categories.

AI is a shopping advisor

• 55% use AI to find the best deals and 51% will use it for comparisons.
• 76% view AI as somewhat trustworthy, while 29% prefer to make their own shopping decisions.
• 16% would allow AI to complete a purchase.

Shoppers want proof of value

• 52% think Black Friday has the best deals.
• 22% believe advertised discounts reflect true savings, down from 46% in 2025.
• 48% of Millennials and 30% of Gen X are active coupon hunters.
• 29% say discounts represent only partial or rarely reflect actual savings.

TikTok Shop inspires sales

• Nearly half of TikTok users have shopped major holiday sales on the platform.
• 70% have discovered new products.
• Compared with other social platforms, 76% of TikTok shoppers see better offers, limited-time drops, and special promotions.

“The retailers that win won’t necessarily be the loudest discounters,” Jain said. “They will be the ones that look beyond what consumers plan to spend and understand how and where they make purchase decisions. They will move past product assortment, price, and promotion, and seek other ways to provide value such as service and loyalty to drive traffic this holiday season.”