Consumer sentiment heading into the holiday season is defined by a split: most shoppers expect to spend the same or more, yet nearly half worry they cannot afford gifts. According to Retail Dive, an ICSC survey of about one thousand respondents found that 78 percent expect to spend the same or more than last year, while 49 percent are worried about affording holiday gifts and half say personal or household debt will weigh on their budgets. Retail sales are projected to grow between 4.3 and 4.9 percent to more than 1.7 trillion dollars, so the season will expand even as individual shoppers feel squeezed.
Key Conclusions
The first conclusion is that the season will grow through price rather than volume. When 83 percent of consumers say they can manage essential expenses but 49 percent worry about gifts, the marginal dollar goes to categories that carry emotional weight, and it is spent carefully. Retailers that assume a rising tide will lift all categories will be disappointed by the ones where shoppers can simply defer.
The second conclusion is that borrowing has become a normal part of holiday planning. Nearly half of respondents expect to borrow money for purchases they cannot pay in full, and 47 percent say they may pause or reduce debt repayment, savings or retirement contributions to fund gifts. That behaviour supports short-term revenue but raises the risk of a sharp pullback in the first quarter.
Where the pressure shows up
Discounts as a traffic driver
Nearly 70 percent of respondents said discounts, promotions and exclusive deals would encourage more in-store visits. That number is high enough to suggest that discounting is no longer a lever but a baseline expectation. Retailers that rely on full-price gifting assortments without a promotional entry point will struggle to convert browsing into baskets.
AI research before purchase
Just over 60 percent of respondents said they will use AI tools and assistants during the holiday season, up from 47 percent a year earlier, while 86 percent say they will do additional research before buying. The combination is important: shoppers use AI to narrow options and then verify elsewhere. Content that cannot be verified in a second source is unlikely to survive that two-step process.
Best Practices
Design entry price points before premium ones
When budgets are constrained, the first decision a shopper makes is whether a category is affordable at all. Retailers should define an entry price point for each gifting category and make it visible in search and category pages, then use bundles to move shoppers upward. Premium assortments still sell, but they sell after the affordability question is answered.
Offer payment flexibility without hiding it
With nearly half of shoppers planning to borrow, deferred payment options influence conversion. The risk is that financing is buried at checkout, where it arrives too late to affect the decision. Holiday retail sales are projected to top 1.7 trillion dollars, growing 4.3 to 4.9 percentRetail Dive, and in a season of that size, a small improvement in conversion among budget-constrained shoppers compounds quickly.
A practical approach is to surface the payment option on category and product pages, alongside the total cost of ownership, rather than only at checkout. Shoppers who understand the instalment structure earlier are less likely to abandon the basket late, and they are less likely to return the item once the first payment lands.
Common Mistakes
The first mistake is reading intent to spend as ability to spend. The 78 percent who expect to spend the same or more are expressing intent under inflation, which means the same basket costs more. Volume may be flat or lower even when revenue grows, and inventory plans built on unit growth will end the season with excess.
The second mistake is treating AI-assisted shoppers as easier to convert. Shoppers who use assistants tend to compare more, not less, and 86 percent still do additional research. Brands that optimise only for the first AI answer, without supporting it with verifiable detail elsewhere, lose the shopper at the verification step.
Summary
The holiday season will grow in revenue while remaining fragile at the household level, and those two facts have to be planned together. Borrowing, discount dependence and AI-assisted research are all symptoms of the same condition: shoppers want to participate but need to control their risk, and they will abandon any step that makes the risk feel larger.
Retailers that respond with clear entry prices, visible payment flexibility and verifiable product information will capture demand that others lose at the verification stage. Those that rely on the season's headline growth will find that the growth is concentrated in a narrow set of categories.
Data Sources
Retail Dive: Nearly half of shoppers are worried about affording holiday gifts
Retail Dive: Holiday spending forecast to top 1 trillion
Retail Dive: Holiday season ecommerce sales growth 2026
FAQ
How many shoppers worry about affording gifts?
A: 49 percent of surveyed shoppers said they are worried about affording holiday gifts this year, while half said personal or household debt will weigh on their budgets.
Is holiday retail spending still expected to grow?
A: Yes. Sales are projected to grow 4.3 to 4.9 percent to more than 1.7 trillion dollars, driven largely by higher prices rather than unit growth.
What share of shoppers plan to borrow?
A: Nearly half expect to borrow money for purchases they cannot pay in full, and 47 percent may pause or reduce savings and debt repayment.
How many shoppers will use AI during the season?
A: Just over 60 percent, up from 47 percent a year earlier, while 86 percent say they will still do additional research before buying.
Do discounts still drive store visits?
A: Yes. Nearly 70 percent said discounts, promotions and exclusive deals would encourage more in-store visits, making promotion a baseline expectation.
What is the biggest planning risk this season?
A: Confusing intent with ability. Revenue may grow while units stay flat, which leaves inventory plans built on volume exposed to markdowns.
References
Retail Dive: Nearly half of shoppers are worried about affording holiday gifts
