Visa expects U.S. holiday spending to rise again in 2025, but says inflation rather than true volume growth will drive much of that increase. In its latest Visa Business and Economic Insights Holiday Spending Outlook, the company forecasts solid top‑line gains even as real, inflation‑adjusted spending looks more subdued.
Headline growth vs real spending
For the 2025 holiday period from November 1 to December 31, Visa is calling for total U.S. retail sales (excluding auto dealers, gas stations, and restaurants) to grow about 4.6% year over year. After adjusting for higher prices, real spending—used as a proxy for foot traffic and unit volume, is expected to rise by roughly 2.2%, down from about 2.5% last season.
Inflation on holiday‑related goods is catching up with the broader CPI. Recreational goods alone, which account for around 30% of Visa’s holiday CPI basket, saw prices rise about 3.1% year over year in September, pushing dollar sales higher even when shoppers are not buying significantly more items.
Households plan higher gift budgets
Despite economic uncertainty, consumers surveyed by Visa in October 2025 say they plan to spend an average of $736 on holiday gifts, up roughly 10% from about $669 reported in 2024. That increase reflects both resilience and the reality of higher prices across many gifting categories.
The strongest growth is coming from older shoppers. While Gen Z, Millennials and Gen X expect to lift holiday spend by around 5% to 7%, baby boomers are planning a jump of about 21%, to an average of roughly $855. At the same time, nearly 20% of consumers say they will spend less this season, citing limited extra income or weaker confidence in the economy.
Income supports spend as inflation bites
One reason spending is holding up is nominal income. Visa notes that nominal personal income growth remains solid, even as real (inflation‑adjusted) disposable income growth has moderated. That dynamic allows households to keep spending similar or higher dollar amounts even though their purchasing power is constrained.
For retailers, the picture is more nuanced. With nominal holiday sales expected to grow 4.6% but real spending only 2.2%, many will see healthy transaction values yet feel pressure on unit sales, inventory turnover and margins. An extra shopping day in the 2025 season offers a small boost, but does not change the underlying inflation story.
Earlier, more digital holiday shopping
The report underscores that holiday shopping is now spread across the full fourth quarter. More than 57.7% of consumers say they start holiday shopping in October, driven by early promotions, sales and concerns about product availability. Nearly 48% plan to do more than half of their holiday shopping online, reinforcing the ongoing shift toward digital channels.
When Visa broadens its definition to include October, holiday sales are expected to rise about 4.5% year over year, slightly below the 4.8% pace recorded in 2024. That suggests early‑season demand remains solid but is not accelerating dramatically compared with last year.
Resilient but inflation‑heavy season
Overall, Visa describes Holiday 2025 as a season where spending resilience is “tempered by reality.” The roughly 2.4‑percentage‑point gap between nominal growth of 4.6% and real growth of 2.2% highlights how much of the increase comes from higher prices rather than more goods in carts.
For the broader payments and retail ecosystem, that means strong dollar volumes but more complex unit economics. For consumers, it points to a season where careful budgeting, earlier shopping and strategic deal‑hunting will be key to stretching holiday budgets in an environment where almost everything costs more.
