Retailers Face Tight Budgets Amid Challenging Holiday 2025 Spending Decline

The 2025 holiday shopping seasons, including Halloween and the broader end-of-year period, are expected to be financially challenging for consumers and retailers alike due to widespread economic pressures and declining consumer confidence. Nearly half of UK consumers plan to buy Halloween items, but over half intend to cut back budgets, reflecting a low value perception of the holiday; retailers are encouraged to focus on affordable treats and loyalty promotions to stimulate spending. For the overall holiday season, PwC projects a 5% decrease in consumer spending compared to 2024, marking the first significant decline since 2020, with Gen Z reducing their budgets by 23% amid financial strain. Consumer confidence has also weakened significantly, with the University of Michigan's Index of Consumer Sentiment dropping sharply, indicating skepticism about the economy’s future and prompting a shift toward value-driven shopping, such as gift cards and consumables. Retailers face additional challenges including rising shipping costs, labor shortages, inventory issues, and new trade tariffs, requiring more adaptable strategies. Households with children continue to spend nearly twice as much as those without, but overall, shoppers are expected to trade down and prioritize budget-conscious purchases.