U.S. holiday sales of retail businesses showed growth of around 4%, indicating stable consumer demand despite increased interest rates.
Electronics and clothing are the sectors which performed best this season.
In-store retail continued to be a strong trend, though internet buying picked up faster because of initial discounts and convenience.
In the United States, the holiday shopping season is amongst the pivotal seasons in the retail industry, which accounts for a significant chunk of its annual earnings. Every year, the industry looks forward to the statistics released by prominent payment services like Visa and Mastercard, which provide insights into holiday shopping season expenditure trends. This provides a more comprehensive outlook within a shorter span of time compared to retail industry surveys.
During 2025, the period of the holiday season occurred when the economic conditions were quite tough. Although inflation retreated, it still put people under strain. Also, the rising rates of interest made it more expensive for consumers to access credit. This led to concerns about the possibility of a large slowdown in discretionary spending. However, consumers changed the way they spent money. They became mindful of value.
However, one thing worth noting as a trend throughout this year has been the growing use of technology as a factor influencing consumer purchasing decisions. The increasing use of technology powered by artificial intelligence to offer consumers the option to compare prices, discounts, and so on, is reflective of a shift in consumer behavior, where technology is used beyond mere convenience to even manage finances.
Despite the increasing popularity of e-commerce, brick-and-mortar retail continued to be the driving force behind holiday buying. The bulk of overall sales happened from physical retail locations. This is because a physical retail experience offers many advantages, including immediate access to the product and performing holiday-related rituals. However, online sales grew at a faster rate.
Spending behaviors also reflected where consumers felt comfortable spending their funds. Electronics turned out to be the standout category, in line with continuous demand for personal and domestic electronic devices. Clothing and accessories also followed close, due to seasonal and pricing considerations. All these trends make it evident that consumers opted for more useful items rather than discretionary spending. Collectively speaking, the collective data from the 2025 holiday retail season paints a picture of a cautious but resilient consumer. Despite being mindful of the challenges facing the economy, the consumer did not completely ignore the retail market. From the standpoint of the retail industry, it has been reassuring that demand is stable despite the need to shift approaches in light of evolving consumer demands.
