Anticipated Deals Over Black Friday and Cyber Monday
2023 Holiday Retail Outlook: Cautious Consumer Behavior and Tight Budgets
As the holiday season approaches, retailers are bracing for a shift in consumer behavior, with many shoppers adopting a more cautious approach to their spending. According to recent data, the number of consumers planning to do at least some holiday shopping online this year has increased to 82%.
Target CEO Brian Cornell has indicated that macroeconomic trends continue to impact how consumers interact with retailers. Co-CEO and CFO of athletics brand On, Martin Hoffmann, has noted less enthusiasm among shoppers for the holiday season. This sentiment is echoed by Grove Collaborative's new CEO, Jeff Yurcisin.
Despite these concerns, retail sales during the holiday period could increase between 3.5% and 4.6% this year compared to 2022, reaching between $1.54 trillion and $1.56 trillion. Deloitte predicts that e-commerce sales will increase between 10.3% and 12.8%, with online-specific sales potentially reaching $232 billion at a growth rate of 8.4%.
Shoppers earning less than $50,000 annually anticipate increasing their holiday spend by 11% to $742, while those earning more than $200,000 expect to increase budgets by 22% to $3,922 this season. Consumers making between $100,000 and $199,000 plan to increase their holiday budget by just 2%.
In an effort to save money, consumers are going to continue to go to the stores they trust for the experience, but they're going to look beforehand on the website or apps for better deals. Fifty-eight percent of consumers said doorbusters are less appealing, and 55% are trying to avoid crowds this holiday season.
Millennials are expected to be responsible for 43% of Black Friday and Cyber Monday spending in 2023. Forty-nine percent of Gen Z customers plan to do their holiday shopping at malls.
Inflation has moderated somewhat from 2022, but consumers are still concerned about rising costs. Seventy-two percent of respondents indicated they expect goods to cost more this season, and many plan to buy fewer gifts.
Looking ahead to the 2024 holiday season, the baseline for projections is set at $241.4 billion in online sales, up 8.7% over 2023. However, growth for the 2025 holiday season is forecast to decelerate significantly, with total U.S. retail sales for November and December 2025 expected to rise only about 1.2%.
This cautious consumer behavior and tight budgets could be a result of concerns about tighter consumer budgets due to tariffs, inflationary pressures, and softening labor market conditions. Recent data showed consumer sentiment slipping to 58.6 points in August 2025 from 61.7 in July, reflecting anxiety over rising inflation expectations and uncertainty around tariffs.
In summary, retailers should prepare for more cautious consumer behavior and tighter budgets during the upcoming holiday seasons. Consumer confidence is proving to be a sticky issue for the industry, and retailers must adapt their strategies to meet the changing needs of their customers.
- Despite the shift towards online shopping, shoppers are still concerned about inflation, with 72% expecting goods to cost more this holiday season.
- In contrast to previous years, consumers earning less than $50,000 anticipate increasing their holiday spend by 11%, while those earning more than $200,000 expect to increase budgets by only 2%.
- The impact of inflation on consumer behavior is echoed in the sports industry, with On Co-CEO and CFO Martin Hoffmann noting less enthusiasm among shoppers for the holiday season.
- As the holiday season approaches, retailers must adapt their strategies to meet the changing needs of consumers, who are looking for better deals and avoiding crowds.
- The 2023 holiday season could see an increase in e-commerce sales, with Deloitte predicting a growth rate of 8.4% and online-specific sales potentially reaching $232 billion.
- The 2024 holiday season is projected to see continued growth in online sales, with a baseline of $241.4 billion, but growth for the 2025 holiday season is forecast to decelerate significantly.
- The cautious consumer behavior and tight budgets observed during the holiday seasons could be a result of concerns about tighter consumer budgets due to tariffs, inflationary pressures, and softening labor market conditions.
