Shoppers at Walmart’s Supercenter in Burbank were seen during the retailer’s multi-week Annual Deals Shopping Event, as holiday shopping trends begin to take shape. A new PwC survey reveals that holiday shoppers across generations expect to trim both their tree and their spending this season. The survey shows an average planned expenditure of $1,552 on holiday gifts, travel, and entertainment, marking a 5% decline from the average planned spending in the year-ago period. The finding underscores a broader shift in consumer behavior driven by price sensitivity and tightened household budgets, even as demand for experiences continues to rise for many younger shoppers. The PwC report provides a nuanced look at how different age groups approach holiday spending as costs mount and tariffs influence price expectations. It also highlights how retailers may need to recalibrate pricing and promotions to capture value-conscious consumers without sacrificing brand appeal. As the landscape evolves, the insights from this survey will likely shape retail strategies across multiple channels during the critical holiday period.
PwC Holiday Spending Forecast: Generational Snapshot
The PwC survey, which included a representative sample of 4,000 U.S. consumers and was conducted in late June and early July, paints a broad picture of holiday spending intentions across generations. The headline figure is a 5% drop in the overall average planned expenditure on gifts, travel, and entertainment compared with the previous year. The decline is not uniform, however, as different generations display divergent tendencies that reflect evolving incomes, debt levels, and spending priorities. The Gen Z cohort, defined as people aged 13 to 29 with an average age of 22, stands out for contributing to much of the overall downward shift. Gen Z respondents reported plans to spend 23% less on average than they did a year ago, marking the largest predicted decrease of any single generation. This contrasts sharply with the prior year, when Gen Z said they expected to spend 37% more, a swing that underscores how volatile and price-sensitive this demographic can be.
Ali Furman, who leads PwC’s U.S. consumer markets industry practice, framed Gen Z’s spending behavior in terms of value and cost transparency. “Price is Gen Z’s love language,” Furman noted, explaining that this cohort has grown up in an era characterized by rising costs and heightened price comparisons. For many in Gen Z, what looks like a downgrade in one form of product is offset by the perceived value of an equally effective alternative. The idea of “dupes”—comparison shopping that leads to cost-effective substitutions—does not imply lower quality but rather smarter shopping. Furman emphasized that for Gen Z, dupes can be evidence of prudent decision-making and savvy financial choices rather than a compromise on quality or experience. This mindset, he suggested, is central to understanding how this generation navigates the holiday season.
From a retailer’s perspective, Gen Z represents both an opportunity and a challenge. Furman explained that as Gen Z members transition into broader adulthood, they typically earn smaller salaries, carry new expenses, and carry debt to manage. The cohort’s experiences tend to drive spending priorities more toward non-material experiences—concert tickets, hotel stays, and plane trips—than toward accumulating tangible goods. As experiences cost more, Gen Z tends to allocate a larger share of their limited budgets to entertainment and travel. “Entertainment and vacations are taking up more of their wallet than they have, and therefore they have less to spend on holiday,” Furman noted. This shift has important implications for retailers that depend on impulse buys or high-margin physical goods during the holiday season.
Retailers also face the reality that Gen Z is quick to adopt and discard trends, a dynamic that complicates inventory planning and promotion timing. The survey results underscore how rapidly changing preferences can complicate merchandising strategies, especially when price signals may accelerate shifts away from certain items. For retailers, the takeaways from the PwC survey suggest a holiday season that could begin with tighter price sensitivity and extend into peak shopping periods as consumers balance demand with affordability. The report also indicates that the remaining generations’ spending patterns are more stable, providing a contrast that retailers can leverage when crafting tiered promotions and tailored messaging.
Baby Boomers, by comparison, appear more resilient to cost pressures than Gen Z. The PwC survey indicates that baby boomers plan to spend 5% more on average than they did in the previous year. This uptick aligns with broader expectations about relative income stability and a potential preference for value-driven purchases that emphasize quality and durability. Across other generations, spending expectations remain roughly flat from a year ago, signaling mixed signals for retailers who must navigate a market where some demographics tighten budgets while others pull more strongly on discretionary spending.
The survey’s results suggest that households entering the season are particularly mindful of rising living costs, including utilities and daily living expenses. Furman pointed out that even shoppers who are not actively seeking new tariffs or price hikes still react to the perception that prices could go up. The threat of higher costs tends to sharpen shoppers’ focus on price tags and drive a tendency to delay purchases or shop early to lock in deals. “It’s not necessarily the tariffs themselves that are driving sentiment and behavior,” Furman explained, “It’s the threat prices may go up, and people have a consciousness around that.” This phenomenon reflects a broader retail psychology in which forward-looking price expectations shape shopping plans even before specific price increases materialize.
Gen Z: The Price-Sensitive Buyer and Its Channel Implications
Gen Z’s unique approach to spending—driven by value, transparency, and a willingness to substitute with lower-cost options—has broad implications for how brands position products and promotions. The data suggest that this generation prioritizes value in every sense: affordability, access to experiences, and the ability to stretch a budget further through smarter shopping choices. The reliance on cost transparency means that promotions, price comparisons, and clearly communicated savings are likely to resonate more with Gen Z than broad brand messaging alone. Retailers could respond by emphasizing price clarity, total-cost-of-ownership messaging, and robust value propositions that translate into tangible savings over time.
Another dimension of Gen Z’s spending is their perceived prioritization of experiences over goods. As they move further into adulthood, many are balancing new responsibilities—student debt, housing costs, and other financial commitments—that constrain discretionary purchases. Yet experiences—concerts, travel, festivals, and other events—remain appealing because they deliver social and personal value that goods may not. The PwC findings suggest that retailers and travel and hospitality providers alike should consider tiered offerings that pair affordable core options with value-added experiences. Bundling tickets with accommodations, or offering experience-forward packages at approachable price points, could be a way to capture Gen Z’s attention without triggering sticker shock.
Gen Z’s adoption cycles also present a dynamic challenge for retailers. The fastest generation to adopt and abandon trends means inventory and promotions must be highly responsive. Retailers may benefit from agile merchandising strategies that allow quick pivots in assortment based on real-time feedback from younger shoppers. In practice, this could involve shorter promotional windows, rapid restocking of popular items, and data-driven price adjustments that reflect evolving demand signals. The emphasis on experiences, coupled with a cautious stance toward expenditure, suggests that promotions should foreground value and access rather than pure discounting on goods that do not deliver a comparable experiential payoff.
Tariffs, Prices, and the Consumer Sentiment Equation
Tariffs and potential cost increases emerge as a critical backdrop to the holiday spending conversation. The PwC survey indicates that price expectations—whether or not tariffs are directly felt in the final price of a specific item—are shaping consumer sentiment and shopping behavior. Shoppers are paying closer attention to price tags and delaying purchases when possible, in part to test whether prices could drift higher if tariff-related costs pass through to consumer-facing prices. The phenomenon is less about the direct impact of tariffs on particular products and more about the psychological and behavioral effects of anticipated price changes.
Furman’s comments underscore a broader understanding of how tariffs influence consumer psychology. The fear of price increases creates a cautious shopping environment where shoppers seek the best possible deal and minimize exposure to price volatility. Utilities and other essential cost drivers exacerbate this cautious stance, contributing to a belief that every purchase should be optimized for value. The overall effect is a general tightening of holiday budgets, as families prioritize essential expenses and weigh the trade-offs between travel, gifts, and entertainment.
In practice, the respond-to-tariffs mindset pushes retailers to balance promotional intensity with price discipline. For example, if tariffs create an environment where higher costs could be passed along, retailers may choose to absorb some of the price increases to preserve demand and avoid eroding customer goodwill. Alternatively, they may offer value-packed bundles that deliver perceived savings even when sticker prices rise. The PwC findings imply that retailers should coordinate across pricing, promotions, and product assortment to ensure that price-sensitive segments—especially Gen Z—do not feel alienated by price changes that seem abrupt or unexplained.
Another implication concerns consumer expectations around timing. The prospect of tariff-driven price shifts encourages shoppers to plan early, seeking out promotions before price elevations become widespread. This behavior aligns with a broader trend toward early-season shopping observed in many markets, driven by the desire to secure the best possible deal before prices firm up or promotional windows close. For retailers, recognizing this pattern means aligning promotional calendars to reward early purchases with meaningful savings, rather than resorting to later-stage discounting that may erode perceived value.
Generational Comparisons: Boomers, Millennials, Gen Z, and Beyond
Beyond Gen Z, the PwC survey reveals that other generations display a mix of stability and moderate shifts in spending expectations. Baby boomers, for instance, are forecast to spend 5% more on average than they did in the prior year. This uptick could reflect a rising confidence in retirement portfolios, shifts in discretionary budget allocations, or a preference for durable goods and high-quality experiences that deliver lasting value. In contrast, Millennials and other middle-age cohorts tend to exhibit more stable, flat-level spending expectations, suggesting a balance between cost concerns and the desire to maintain standard holiday rituals.
These divergent patterns present a challenge and an opportunity for retailers who must tailor their offerings to address multiple generational preferences. For older shoppers, value may equate to reliability, durability, and long-term savings; for younger shoppers, it is closely tied to price transparency and the ability to stretch a budget to accommodate experiences that provide social and personal meaning. Retailers can address these differences through segmented marketing, multi-channel promotions, and product assortments designed to appeal to each cohort’s evolving priorities. In doing so, retailers not only maximize holiday-season performance but also reinforce brand equity across a diverse consumer base.
The PwC report’s methodology—surveying 4,000 U.S. consumers with a late-June to early-July window—provides a snapshot that retailers can use to anticipate demand patterns in the weeks leading up to holidays. While the numbers offer meaningful guidance, the interpretation is also shaped by broader macroeconomic factors such as wage growth, unemployment rates, inflation, and consumer debt levels. The analysis underscores the importance of a balanced promotional strategy that blends price-conscious options with higher-value offers for those willing to spend more on premium experiences and durable goods.
Retail Strategy Implications: Promotions, Pricing, and Promotion Timing
In light of the survey findings, retailers face a nuanced promotional landscape for the holiday season. The overarching theme is price sensitivity tempered by a continued demand for experiences and quality. Retailers may consider several strategic avenues to navigate this environment effectively. First, price transparency should be central to marketing messages. Clear communication about savings, bundle value, and total-cost-of-ownership can resonate with Gen Z and other cost-conscious shoppers who demand accountability for every dollar spent. Second, promotions should be designed to deliver tangible, easily understood benefits. Bundled offers that pair goods with experiences or services can attract attention from younger consumers while providing perceived added value even when individual item prices rise.
Third, retailers might optimize inventory and promotions through rapid-response strategies. Given Gen Z’s propensity to adopt and abandon trends quickly, dynamic merchandising—where product assortments shift in response to live demand signals—can help ensure that promotional dollars are directed toward items with the strongest consumer pull. This approach reduces the risk of markdowns on slow-moving stock and helps maintain margins in a price-conscious environment. Fourth, early-season shopping incentives could be particularly effective in encouraging early purchases and locking in favorable prices before any tariff-related price increases become more pronounced. By rewarding early decision-making, retailers can smooth demand and improve forecast accuracy.
Another practical implication concerns the emphasis on experiences. If Gen Z and other segments are prioritizing travel, concerts, and hotels over traditional gifts, retailers may explore partnerships or cross-promotional opportunities within the travel and hospitality ecosystem. Co-branded packages, loyalty rewards that capitalize on experiential spending, and exclusive access to events could create a compelling value proposition. By aligning promotions with the broader shift toward experiences, retailers can expand the scope of holiday campaigns beyond goods to a broader lifestyle and value-driven framework.
The ongoing debate about tariff absorption versus pass-through remains a critical consideration. Retailers must weigh whether absorbing some tariff costs could protect demand and sustain sentiment, or whether pass-through is unavoidable and should be framed as a temporary price adjustment rather than a permanent change. The PwC findings suggest that consumer sentiment is sensitive to price trajectories rather than the origin of those price pressures. As a result, pricing strategies should emphasize fairness, predictability, and consistent messaging about savings and value, rather than abrupt price hikes that could erode trust.
Methodology and Limitations: Interpreting the PwC Survey
The PwC survey’s methodology and scope provide essential context for interpreting its findings. The study drew on 4,000 U.S. consumers and was conducted in late June and early July, a period that captures early-season attitudes but may not reflect late-season shifts or evolving economic conditions. The sample’s representativeness is a key strength, enabling broad generational comparisons and a snapshot of current sentiment. However, as with any consumer survey, certain limitations apply. Self-reported spending intentions may differ from actual spending behavior once holiday promotions, family budgets, and travel plans crystallize. Seasonal dynamics, major macroeconomic events, and evolving tariff policies could further influence actual outcomes in the weeks and months ahead.
Additionally, the generational groupings—Gen Z (ages 13–29, average 22) and baby boomers—provide a framework for analysis but may mask heterogeneity within each cohort. Individual circumstances such as education, geographic location, household composition, and debt burden can yield divergent spending patterns within the same generation. Retailers and analysts should treat these insights as directional indicators rather than precise forecasts for every household. The PwC report’s emphasis on price sensitivity and value orientation across cohorts remains a valuable guide for strategic planning, even as external conditions shift over time.
For readers seeking to translate these results into actionable retail tactics, the key takeaway is to monitor price signals closely and to respond with flexible, value-driven options. Early shopping incentives, transparent savings messaging, and experiences-oriented bundles can align with the evolving preferences identified in the survey. As the holiday season approaches, retailers should maintain agility in pricing, promotions, and product assortment to adapt to both the macroeconomic context and the changing tastes of younger consumers who drive a substantial portion of holiday demand.
Consumer Behavior: Budgeting, Timing, and Smart Shopping
The PwC findings illuminate a broader shift in consumer budgeting and purchasing timing as households prepare for the holidays. With rising utility bills and other living costs, buyers are adopting a more cautious approach to discretionary spending. Price tags have become a central focus, and many shoppers are delaying purchases or opting to shop early to secure favorable prices before potential tariff-driven increases materialize. This behavior reflects a strategic approach to household budgeting, where individuals aim to maximize value while minimizing risk.
For Gen Z, in particular, the emphasis on value is intertwined with a broader fight against the erosion of purchasing power. The push toward cost transparency and the acceptance of lower-priced alternatives as valid options highlights a willingness to adjust preferences in the name of savings. It also underscores the importance of providing accessible price information and clear, credible savings narratives. Retailers that can deliver straightforward, verifiable savings—and do so consistently across channels—may gain traction with this cohort and other price-conscious shoppers.
Consumers across generations are balancing multiple pressures: the desire to celebrate the holidays with meaningful gifts and experiences, the reality of rising costs, and the awareness that prices could climb if tariffs or other economic pressures intensify. The survey suggests that many households are prioritizing essential expenses and re-evaluating the role of nonessential purchases in their holiday plans. Retailers who respond with adaptable promotions, transparent value propositions, and a willingness to accommodate early shopping timelines can position themselves to capture demand even as overall spending remains below the previous year’s pace.
In summary, the PwC data describe a holiday season characterized by price sensitivity, a strong appetite for value, and a continued preference for experiences among younger shoppers. The challenge for retailers is to craft strategies that deliver clear savings, provide access to experiences or bundles with perceived added value, and maintain flexibility in pricing and inventory management. By doing so, they can foster trust and loyalty across generations while navigating the uncertain macroeconomic backdrop that shapes consumer sentiment.
Conclusion
The PwC survey’s findings depict a holiday season that is unlikely to follow a simple path of uninterrupted growth. Across generations, households plan to spend less on holiday gifts, travel, and entertainment than they did a year ago, with Gen Z leading the decline at 23% versus the prior year. The overall projected average spend of $1,552 represents a tangible contraction that retailers must address through thoughtful pricing, value-focused messaging, and agile promotions. Price sensitivity dominates Gen Z’s purchasing mindset, reinforced by a demand for cost transparency and a willingness to substitute with lower-cost options when appropriate. Experiences remain a key driver for younger shoppers, signaling that promotions framed around access, inclusivity, and experiential value can resonate even as goods spending softens.
Baby boomers show a contrasting trend, projecting a 5% year-over-year increase in holiday spending, which highlights the generational diversity of consumer behavior. For retailers, this heterogeneity underscores the need for segmented strategies that balance affordability with quality and durability. The looming backdrop of tariffs, rising utility costs, and the possibility of price increases adds a psychological layer to decision-making, prompting shoppers to shop early and seek the best deals while remaining mindful of price trajectories. In response, retailers should emphasize price transparency, predictable savings, and bundles that combine goods with experiences or services to deliver real perceived value.
As holiday planners and retailers prepare for the season, the PwC insights provide a framework for navigating a period of cautious optimism rather than exuberant spending. The message for the sector is clear: adapt pricing and promotions to reflect actual consumer sensitivities, align with younger shoppers’ preference for value and experiences, and maintain the flexibility to adjust strategies as tariffs and other costs evolve. The 2024 holiday shopping landscape, shaped by price concerns and evolving generational preferences, invites a strategic blend of affordability, experiential marketing, and clear value propositions that can sustain demand throughout the season. Through careful execution of these principles, retailers can meet consumer expectations, protect margins, and foster lasting relationships with shoppers across generations.
