What's Happening?
A recent survey by Deloitte indicates that Gen Z shoppers are expected to significantly reduce their holiday spending due to economic pressures. The survey reveals that consumers plan to spend an average
of $1,595 this year, marking a 10% decrease from 2024. Spending on retail goods is projected to fall by 14%, while spending on experiences is expected to drop by 6%. Gen Z shoppers, in particular, are anticipated to cut their spending by 34% year-over-year. This trend is attributed to declining consumer confidence and concerns about tariffs, which could impact sales during the holiday season.
Why It's Important?
The reduction in holiday spending by Gen Z shoppers highlights broader economic uncertainties affecting consumer behavior. As younger generations pull back on spending, retailers may face challenges during the crucial holiday shopping period. This shift could have significant implications for the retail industry, potentially leading to lower sales and affecting economic growth. The survey also underscores the importance of consumer confidence in driving spending, with many shoppers expressing anxiety about rising prices and a weakening economy.
What's Next?
Despite the anticipated decline in spending, retailers are optimistic about the holiday season and have begun offering discounts to attract shoppers. Companies like Walmart and Macy's have expressed confidence in their holiday sales forecasts, citing strong back-to-school shopping periods. Analysts suggest that the outcome of this year's holiday shopping period could serve as an indicator of the economy's direction, with a poor season signaling potential challenges ahead.
