Holiday retail sales are projected to grow between 2.9% and 3.4% this year, reaching $1.61 trillion to $1.62 trillion, according to Deloitte’s 2025 holiday forecast reported in Forbes.com recently. That’s about $40 to $45 billion more in spending than last year. Deloitte says the bump will likely come from steady gains in disposable income and resilient consumers who aren’t pulling back as much as some might expect.
Even with this increase, however, growth is expected to come in below last year’s 4.2% gain. Deloitte anticipates disposable personal income to rise between 3.1% and 5.4% during the holiday season. The firm has found that income growth is one of the strongest predictors of retail and e-commerce sales, and this year’s uptick could help offset ongoing concerns about the labor market, high credit card balances, and student loan repayments.
E-commerce will be a bright spot. Deloitte expects online holiday sales to grow between 7% and 9%, totaling between $305 billion and $310.7 billion. This forecast is based on economic factors and not yet on consumer surveys, so a clearer picture of planned spending will come once Deloitte releases its annual consumer trends report next month.
Deloitte also notes that this year’s holiday spending patterns are returning to more typical, pre-pandemic growth rates. Brian McCarthy, a principal in Deloitte’s retail strategy and analytics practice, says retailers should take this slower growth as a cue to focus on value, pricing, and thoughtful promotion timing. He also expects consumers to lean into private-label and domestically produced goods this year. Deloitte’s forecast incorporates wage and income trends, along with two anticipated interest rate cuts later in the year.
Interest rate changes might not immediately shift consumers’ savings or spending habits, but McCarthy says they do influence consumer sentiment. If shoppers feel more confident about their financial situation, they’re more likely to spend a little more during the holidays. That confidence has led to surprises in recent years. Last year, Deloitte predicted holiday sales would grow between 2.3% and 3.3% – however, in 2024 consumers delivered a 4.2% increase instead.
Still, there are some signs of caution. PwC’s latest holiday survey shows that, for the first time since 2020, Americans say they plan to spend less this holiday season. Average spending is expected to drop 5%, with Gen Z reporting a dramatic 23% cut to their holiday budgets. That could make competition for Gen Z’s dollars fiercer, and retailers may need to be even more strategic to win over younger shoppers this year.
