Key Takeaways
- Visa forecasts U.S. holiday retail sales will increase 4.5% year over year, supported by income growth and elevated household wealth despite continued inflation.
- Consumers remain willing to spend this season, but many are trading down to lower-cost brands and prioritizing physical gifts over travel and experiences.
In line with National Retail Federation (NRF) and Deloitte among others, new research from Visa Business and Economic Insights (VBEI) forecasts U.S. holiday retail sales will rise 4.5% year-over-year in November and December.
The 2026 U.S. Holiday Spending Outlook report points to continued consumer resilience, supported by solid income growth and household wealth, even as inflation influences where holiday dollars go. VBEI expects prices for holiday-related goods to rise approximately 3.4%, with inflation-adjusted holiday spending increasing 1.1%.
The outlook, the strongest projection since 2021 from Visa, found consumers plan to spend an average of $777 on holiday gifts this year, up from $736 in 2025, an increase of 5.6%.
Lower-Income Shoppers Shift to Value as Holiday Spending Rises
That willingness to spend comes as consumers continue to adapt to higher prices. Roughly one-third of consumers earning less than $100,000 say they plan to switch to lower-cost brands or stores for holiday gifts compared with last year, underscoring the continued importance of value.
“Consumers are heading into the holidays with the capacity and willingness to spend, even if they’re being thoughtful about where those dollars go,” said Michael Brown, principal U.S. economist at Visa in a statement. “Income growth continues to provide an important foundation for spending, and while higher prices remain part of the picture, we expect another healthy holiday season.”
Travel Costs Push More Holiday Dollars Toward Physical Gifts
While VBEI’s holiday sales measure focuses on retail and excludes travel and dining, dollars that might otherwise have gone toward holiday trips could instead flow toward physical gifts and other merchandise. More than half of survey respondents put travel and live events at the top of their holiday wish lists, yet only 15% say they are prioritizing spending on experiences, compared with 27% prioritizing physical gifts.
Higher travel costs are contributing to that disconnect. VBEI analysis of anonymized Visa credit card transactions found that households earning more than $200,000 were the only income group to increase both holiday airfare bookings and spending in September, with trips booked up 29% and spending up 38% from a year earlier. In contrast, lower-income groups pulled back sharply on airfare booking and spending.
Income Growth, Household Wealth Support Seasonal Spending
Despite slower job creation, positive real income growth and elevated household wealth continue to support consumer spending heading into the holidays. Shoppers remain attentive to prices due to economic headwinds, reinforcing a holiday season defined by both willingness to spend and a continued focus on value.
The report comes after National Retail Federation (NRF) projected holiday sales to grow 4.2% this year to $1.013 trillion. Deloitte’s survey found consumers expect to spend $1,654 on average this holiday shopping season, up 4% from $1,595 in 2025, with gains primarily coming from Gen Z and millennials. The outlier for the season has been Simon-Kucher, who has ptojedted Americans planning to decrease theirs spending by 5.5% less this season to an average of $1,018, to returning back to 2024 levels.
“Consumers are still spending, but they’re making deliberate choices about where their holiday dollars go,” Brown said. “That combination of healthy spending and continued focus on value is likely to define this holiday season.”
To read the full 2026 U.S. Holiday Spending Outlook report, click here.
