Holiday sales in the United States are projected to decline for the first time in five years, driven largely by younger consumers cutting back amid rising living costs, according to PricewaterhouseCoopers.

A survey conducted in June found more than 80 percent of respondents plan to reduce discretionary spending over the next six months. The steepest contraction came from Generation Z, who expect to scale back seasonal purchases by about 23 percent. Millennials, Generation X and Baby Boomers, by contrast, said they would maintain or slightly increase their spending compared with 2024.

Overall, PwC estimates holiday expenditure will fall by an average of 5 percent this year, a reversal after steady growth since the pandemic recovery began. This would mark the first notable decline since 2020, as reported by Bloomberg.

The retail sector is bracing for higher costs linked to new tariffs. Walmart chief executive Doug McMillon recently said import prices were rising “week by week” as companies work through older inventory brought in before levies increased. Although retailers have avoided broad price hikes, shoppers are becoming more selective, favouring products that offer the strongest value.

Economists have cautioned that while US retail sales have held up so far in 2025, weakness in the labour market and an uptick in inflation expectations could weigh on household confidence heading into the holiday season.