Holiday 2025: Retail’s Moment of Adjustment

Rick Slark
Oct 24
4 min read

A Slark Consulting Group Insight Brief by Rick Slark, Fractional Strategist

Trend: The Numbers Beneath the Season

The data this year tell a quieter, more disciplined story. Deloitte’s 2025 Holiday Retail Survey projects a 10% decline in planned consumer spending, bringing the average holiday budget to $1,595 per shopper—the sharpest pullback since 1997.

More than half of consumers—57%—believe the economy will weaken in the next year, surpassing the pessimism of 2008.

Category breakdown:

Non-gift goods: ↓ 22%
Retail products overall: ↓ 14% (after two years of growth)
High-income households: ↓ 11% overall, ↓ 18% on retail goods
Experience-based gifts: ↑ 7%

Key Insight: Consumers are not withdrawing—they’re refocusing on fewer, more meaningful purchases.

Context: Retail sales rose 7% annually during 2021–2022. This is not collapse—it’s normalization after unusual growth.

2025 Holiday Retail Snapshot

(Deloitte, NRF, Goldman Sachs 2025)

Metric	2024	2025	% Change / Trend
Planned Holiday Spend per Household	$1,775	$1,595	▼ 10%
Consumers Expecting Economic Weakness	54%	57%	▲ Record pessimism since 1997
Spend on Retail Products	Index 100	86	▼ 14%
Non-Gift Categories (Clothing, Décor, etc.)	Index 100	78	▼ 22%
Spend on Experiences	Index 100	107	▲ 7%
Households Earning <$50K	–16%	–24%	▼ Further tightening
Households Earning $200K+	–9%	–18%	▼ Double decline
E-Commerce Share of Total Retail	15.9%	16.3%	▲ Steady upward trend

Insight: A Market Finding Its Balance

For most local and regional retailers, this isn’t a collapse—it’s a recalibration. After years of stimulus-driven demand, shoppers are returning to stability and discernment.

Households aren’t cutting spending entirely; they’re being more intentional. That shift changes how retailers must define value.

What this looks like on the ground:

“Customers are still coming in, but they’re asking more questions. They’re comparing, not abandoning.” — Apparel retailer, Northeast Ohio

Action:

Map one customer journey—from website to receipt. Don’t look for mistakes; look for pauses.
Reassess whether inventory still reflects what customers value most today.

Trend: How Consumers Are Spending Now

While total spending flattens, its composition changes. The NRF forecasts 2.7–3.7% growth, mostly from prices, not volume. E-commerce and non-store sales are increasing by 7–9%, while physical stores remain steady.

Online now accounts for 16% of all U.S. retail sales (up from 10% pre-pandemic), and 60% of consumers blend online and in-store shopping in a single purchase cycle.

Opportunity: Bridge digital convenience with local service.

Example: Target fulfilled over half its digital orders via in-store pickup last quarter. Local retailers can adopt the same model—on a smaller, more personal scale.

Action:

Add an “Order Online, Pick Up Here” option.
Use pickups to highlight higher-margin or seasonal items.
Audit your mobile checkout experience for friction.

Insight: Margins, Inventory, and the Discipline of Restraint

Inflation: ~3.6% Tariffs: Consumers now bear 55% of costs (Goldman Sachs). Risk: Overbuying and clearance markdowns from 2024 linger.

Restraint is not weakness—it’s strategic discipline.

Action:

Shift from bulk orders to modular replenishment.
Flag high-return, low-margin SKUs.
Treat inventory as a liquidity decision, not just a buying one.

Key Insight: The goal isn’t to shrink—it’s to stay sharp.

Trend: Redefining Value in a Price-Sensitive Market

Eight in ten shoppers expect prices to rise. If you don’t clearly explain your value, customers will assume that cost equals risk.

Advantage for independents: Story and service justify price. National chains will fight on price; local retailers can win on experience and trust.

Action:

Train staff to explain the value, not the cost.
Center promotions on quality and longevity.
Reward loyalty with early access, not deeper discounts.

Quote: “Value today is emotional as much as financial.”

Insight: Experience Still Wins

Nearly half of all consumers (47%) plan to gift experiences, up from 39% last year. That same desire for connection shapes in-store behavior.

Case Example: A downtown home décor shop began offering “Coffee & Style” mornings twice a month. Low-cost, high-impact—sales rose 12% in two months.

Action:

Host micro-events, such as “Meet the Maker” or preview nights.
Turn pickups into personal moments.
Add small experiential touches: displays, scents, seasonal corners.

Key Insight: Connection builds margin.

Operations as Brand

Your systems are part of your promise. Seventy % of consumers say that poor checkout or returns processes deter repeat business (NRF).

Action:

Test your process anonymously—buy, return, and call your own store.
Balance fairness and margin in your return policy.
Streamline checkout and reduce friction everywhere.

When operations work seamlessly, marketing spends less to prove it.

Watch These Indicators Closely

Metric	Why It Matters	What to Watch
Conversion Rate	Reveals hesitation points.	If down 20%, review messaging or layout.
AOV (Average Order Value)	Tests upsell & bundling strength.	Decline = highlight paired offers.
Return Rate	Shows product/expectation mismatch.	>15% = review item descriptions.
Pickup Participation	Tracks hybrid convenience adoption.	<5% = feature pickup online.
Sell-Through of Core SKUs	Validates buying precision.	<60% midseason = pivot quickly.
Cash Flow	Your ultimate constraint.	Weekly checks prevent surprises.

Action: Create a one-page dashboard to visualize these metrics weekly. It keeps the team grounded and focused.

Positioning for 2026

By January, you’ll hold the most valuable dataset available—your own. Study it: what worked, who stayed, what moved.

Action:

Hold a 60-minute “What surprised us?” team session.
Capture lessons before spring planning.

Three fundamentals for 2025–26:

Tighten your inventory turns.
Test one meaningful customer experience improvement.
Track cash weekly.

Simplicity drives clarity.

A Thought to Close

Retail doesn’t lose ground when consumers spend less; it loses ground when businesses stop learning and adapting.

This season will test more than sales; it will test adaptability. Watch how your customers move, their pace, preferences, and pauses.

Those who respond with discipline, empathy, and operational clarity will enter 2026 leaner, wiser, and better positioned for advantage.

If you’d like to review how these trends intersect with your strategy—pricing, inventory, or customer retention—I’m here. Sometimes one good conversation brings the clarity that the data can’t.

— Rick Slark Fractional Strategist | Slark Consulting Group slarkconsultinggroup.com