Holiday sales projected to experience a 5% decline due to Gen Z consumer retreat, as forecasted by PwC
Holiday Spending Trends: A Generational Shift
As the holiday season approaches, retailers are gearing up for a shift in spending patterns, with baby boomers and Gen Z consumers leading the charge.
According to PwC's holiday outlook, baby boomers are set to increase their holiday spending by 5% this year, a marked contrast to the 2% decrease in spending seen last year. Gen X shoppers are also planning to spend 2% more during the holiday season compared to last year. However, the overall holiday spending is expected to decrease by 5%, marking the first such decrease since 2020.
Gen Z consumers, whose average age is 22, are increasingly taking on financial obligations such as student loans and having families. This generation is becoming more intentional about their spending, prioritizing value over extravagance. Price is considered "Gen Z's love language," and they are willing to trade down, seek out dupes, or opt for secondhand items.
Ali Furman, consumer markets industry leader at PwC US, emphasizes the need for retailers to cater to Gen Z's distinct preferences. Retailers should address both early and late shoppers by maintaining stable marketing efforts over a longer period, from early autumn impulses to last-minute December offers. They need to emphasize unique and affordable products that appeal to Gen Z's desire for individuality and value.
Retailers are encouraged to prioritize novelty and value that Gen Z consumers care about, such as limited drops, treasure hunts, and affordable collaborations on social media. These strategies aim to excite Gen Z consumers and balance their demand for uniqueness and price.
In contrast, millennials plan to spend about 1% less on average during the holiday season compared to last year. Despite this, majorities in all generations are focusing on value during the holiday season, with Google searches for "discount" and "coupon code" growing by 11%.
Nearly 80% of consumers are seeking less expensive alternatives during the holiday season, and 65% are looking for discounts on seasonal merchandise after the holidays. Deal-seeking is expected to continue into 2026, with 84% of consumers planning to cut back in the next six months due to rising prices, new tariffs, and the higher cost of living.
Baby boomers are also the fastest-growing cohort buying online, according to PwC's research. However, they are not the only ones embracing e-commerce. Gen Z consumers are also making their presence felt in the digital shopping landscape.
Deloitte expects holiday sales to rise up to 3.4% this year. Despite the overall decrease in spending, it seems that consumers across all generations are thinking in terms of value this holiday season, seeking out deals and discounts to make their holiday purchases more affordable.
