American shoppers are feeling the squeeze this holiday season, with about half saying it’s harder than usual to afford gifts amid persistent inflation concerns, according to new polling data.
The financial strain has prompted a significant shift in spending habits, with 64% of U.S. consumers reporting they’ve decreased household spending in at least one category as the 2025 holiday season approaches, a trend that reveals both economic anxiety and adaptive consumer behavior.
How bad is the inflation perception? Nearly nine in ten American adults — a staggering 87% — have noticed higher than usual prices for groceries in recent months. About two-thirds report the same for electricity and holiday gifts, while half have felt the pinch at the gas pump, according to data published this week.
Cutting Back, But Not Cutting Out
Despite economic concerns, Americans aren’t abandoning holiday celebrations. The National Retail Federation indicates that 91% of consumers still plan to celebrate winter holidays, though they’re making adjustments to their approach. The average consumer is budgeting about $890 for gifts and other holiday purchases.
“We’re seeing consumers become more strategic about their holiday spending,” said retail analyst Morgan Chen, who wasn’t involved in the studies. “They’re not necessarily buying fewer gifts, but they’re hunting for deals more aggressively and starting their shopping earlier to spread out expenses.”
The sentiment cuts across political lines. Even among former President Trump’s base — which has typically expressed more economic optimism since the election — there’s widespread agreement that holiday prices are higher than normal, as noted in recent AP-NORC polling.
Supermarkets remain the top shopping destination for 47% of holiday consumers, with online retailers following closely at 45%. This represents a slight shift toward brick-and-mortar shopping compared to the pandemic years, though e-commerce remains a crucial component of holiday spending.
Adaptation Strategies
Consumers are getting creative with their budgeting. Melissa Randolph, a mother of three from Indianapolis, exemplifies the trend: “I’m using cash-back apps, price matching, and buying some things second-hand. My kids understand we’re being careful this year, but we’re making it special in other ways.”
The Bangor Daily News reported that many shoppers are cutting back more than they have in previous years, suggesting that despite official inflation figures showing moderation, the cumulative effect of years of price increases has worn down consumer resilience.
Still, retailers are responding with extended sales periods and more flexible payment options, hoping to capture cautious consumer dollars. Many have introduced “buy now, pay later” options specifically marketed toward holiday shoppers who are feeling the pinch.
The economic anxiety comes despite recent positive macroeconomic indicators, highlighting the disconnect between broad economic metrics and kitchen-table financial realities for many Americans. For now, it seems, ’tis the season to be frugal.
