How Consumer Finances Are Shaping This Upcoming Holiday Season

When it comes to purchasing power in 2025, many demographics have yet to recover from the pandemic at the turn of the decade. When measuring the assets, income, debt and credit of consumers over the past 4 years, only Baby Boomers saw a slight improvement in financial status. In particular, Gen Z saw the largest deterioration in financial status – followed by Millennials. As a result, these 2 youngest generations are seeing an increase in delinquencies and forecast less spending during the holidays compared to 2024.

With this in mind, what can be expected this holiday season and what can we do about it? For retailers, the key is to properly present the value products offer. When consumers have less in savings, discretionary spending naturally falls proportionally. However, consumers are most likely to purchase gifts for family members and children, so focusing on those items can help mitigate the overall decrease in spending. For lenders, less assets means consumers will be more heavily relying on credit. By preparing for credit line increases and focusing on loan requests, you can ensure your institution is not overwhelmed during this holiday season.

For consumers, the best way to make sure you’re able to make ends in such a climate is with a little help. Companies like Equifax offer the Market Pulse of holiday shopping trends that forecast larger trends and insights to keep you apprised of potential hardships.

Source: Equifax