The National Retail Federation projects that holiday spending will reach $1 trillion this season. However, recent consumer sentiment data indicates that shoppers are feeling anxious about their spending habits. Zions Bank reports that higher-income consumers are driving much of this anticipated spending, but other demographics are experiencing more financial strain. A survey from the Bank of America Institute reveals that approximately 58% of consumers perceive holiday gifts as being more expensive this year. The reasons cited for these rising prices include inflation (62%), tariffs (58%), and corporate profit prioritization (33%). Robert Spendlove, a senior economist at Zions Bank, notes that while inflation rates are dropping, they remain higher than desirable, leading to increased pressure on consumers' budgets. According to the survey, 68% of shoppers identify pricing as the primary factor affecting their holiday purchasing decisions. Additional influencing factors include convenience, loyalty rewards, and social media trends. The survey indicates that consumers expect less financial flexibility this holiday season. To manage their spending, 53% of respondents plan to adhere to a budget, 38% intend to shop at discount retailers, 36% will redeem rewards or points, and 31% aim to buy fewer gifts for fewer people. Spendlove points out that as consumers experience financial pressure, many are seeking cheaper alternatives. The shift towards lower-cost options is evident across various retailers, including Walmart, Target, and discount stores. Notably, 38% of consumers report that they will only purchase gifts for immediate family and close friends, while 23% have discussed reducing gift-giving with family. Another 23% plan to maintain their gift list but will opt for smaller, less expensive items, and 21% are considering practical or experiential gifts. The survey also highlights that 87% of consumers are likely to utilize discount retailers, and 54% are shopping at wholesalers, a notable increase from 39% in 2024. Conversely, interest in outlet malls and e-commerce platforms is declining.