Mastercard Economics Institute Release Holiday Retail 2025 Forecast

“Consumers will continue spending with holiday sales of 3.6% yoy. E-commerce will continue to drive the growth as consumers look for deals,” said Michelle Meyer, Chief Economist at MEI. Inflation, Mastercard’s analysts note, will fuel a larger share of the spending increase than raw sales volume itself.

Tariffs on goods such as clothing, toys, and décor are adding complexity to pricing, forcing retailers to decide whether to absorb costs or pass them on to consumers, creating highly competitive pricing battles across sectors.

Shopping Smart: Budgets, Gift Cards, and Flexibility When prices rise, shoppers adapt, and in 2025, that means gift cards are back in fashion. MEI observes that gift card usage will surge sharply this year as buyers seek ways to maintain generosity without overextending budgets.

“Gift cards don’t eliminate inflation, but they can help gift givers be generous while navigating rising prices,” the report explains. Roughly one-third of all gift card spending happens in December and January, meaning the economic ripple will reach into 2026…