Global consulting firm AlixPartners is anticipating 3% to 5% retail sales growth for the 2025 holiday season, with high-income shoppers driving the forecasted gains.
In releasing the company’s U.S. Retail Holiday Outlook, AlixPartners noted the lower end of its prediction is in line with its expectation regarding inflation, which means the high end of its prediction would represent 2% real growth.
The AlixPartners study revealed shoppers across all income brackets intend to reduce spending in almost every category, with holiday food and beverage at home being the only segments for which increases are likely, the potential gain driven primarily by high-income households.
AlixPartners based the outlook on a survey of consumers living across the United States who told the company they remain cautious when it comes to spending as inflation roils household budgets.
The data indicated 80% of consumers plan to spend the same or less this year than last, with 35% anticipating lower spending, a higher proportion than was the case in 2024, AlixParterns noted. The expected spending decline follows an uptick in retail sales earlier this year when worried consumers spent ahead of tariff impositions and the higher prices they might spur.
The survey indicated that almost 40% of polled consumers say they intend to buy 50% or more of their holiday purchases in response to sales. In demographic terms, AlixPartners maintained, GenX consumers have an elevated focus on promotions, at 48%, compared to GenZ consumers, at 30%. Older generations are accustomed to high/low pricing strategies and wait for sales, AlixPartners noted, and Millennials and GenZers are less inclined to do so, which means retailers will need to deploy promotional strategies that include personalization to be effective across the board this holiday season, the company stated.
High-income consumers making more than $100,000 per year will be the main drivers of holiday spending across retail categories. More than 30% of high-income survey respondents planned to spend more this year, compared to less than 20% of other income groups. AlixPartners pointed out that high-income consumers would place more emphasis on travel and leisure in their additional spending.
The top strategies for reducing spending include shopping for more affordable brands, with private-label goods in the mix, buying fewer gifts in total and purchasing a significant number of gifts on sale or as part of a promotion, the survey indicated. Some 67% of consumers surveyed intend to make 30% or more of their purchases online.
If an item is out of stock, one-third of consumers said they would complete the purchase on a retailer’s website, with most opting to go to a rival’s store or website.
Half of respondents said they believed the economy is worse now than a year ago, and 45% expect it to worsen in the coming year. One-third of shoppers reported their personal financial health is worse than it was a year ago, and 27% reported an improvement.
Households will again spread out holiday purchasing, AlixPartners noted, with many starting even earlier in 2025 than they did in the past.
“The 2025 holiday retail season is shaping up to be a challenging one, with consumers remaining highly cautious and price-sensitive,” said Sonia Lapinsky, AlixPartners partner and managing director. “Retailers will need to adapt to these evolving behaviors by focusing on value, optimizing inventory management and leveraging integrated channel strategies to meet consumers wherever they choose to shop. Understanding the nuances of consumer sentiment and tailoring offerings, especially for high-income households who are still willing to spend, will be crucial for success.”
