Nearly half of US consumers plan to spend about the same this holiday season despite inflation concerns, while shoppers become more selective and increasingly turn to AI for deals and gift ideas.
US consumers remain cautious about the economy and are cutting back on discretionary purchases, but holiday spending is expected to remain broadly stable, according to the latest ConsumerWise research by McKinsey & Company.
The survey found that 47 per cent of US consumers expect to spend about the same amount during the 2026 holiday season as they did last year. Meanwhile, 23 per cent plan to increase their spending, while 21 per cent expect to spend less. Another 9 per cent have not yet decided.
The findings highlight continued caution among American consumers as concerns over inflation and rising prices weigh on sentiment. In the third quarter of 2026, 41 per cent of respondents said they had mixed feelings about the economy, while 34 per cent were optimistic and 25 per cent remained pessimistic.
Inflation remains the biggest concern
Rising prices and inflation were cited as the biggest economic concerns by 53 per cent of respondents, indicating that price pressures continue to influence household spending decisions.
Despite the cautious outlook, spending intentions for essential categories remain broadly stable over the next three months. Gasoline is an exception, with consumers showing a stronger intention to reduce spending amid renewed volatility in fuel prices.
Discretionary spending, meanwhile, is expected to remain more selective. McKinsey said consumers plan to pull back across several discretionary categories, with spending intent weakest for home decor, accessories and furniture. Apparel has also recorded a significant seasonal decline in spending intentions compared with the previous quarter.
More from BusinessThe trend suggests that consumers are still spending but are becoming increasingly selective about where their money goes. Retailers and consumer-facing businesses may therefore need to focus more heavily on value, relevance and competitive pricing as households manage tighter budgets.
Holiday shopping starts earlier
US consumers are also expected to begin their holiday shopping earlier this year. According to the McKinsey research, 45 per cent of respondents expect to start shopping by the end of October.
The earlier start could prompt retailers to bring forward inventory planning, staffing and promotional campaigns ahead of the crucial holiday shopping period. McKinsey also highlighted the need for retailers to tailor their strategies to different generations of consumers.
AI emerges as a new shopping tool
Artificial intelligence is also becoming an increasingly important part of the holiday shopping journey. Forty-six per cent of consumers said they would probably or definitely use AI tools for holiday shopping.
Among consumers planning to use AI, the most common applications include comparing products and prices, finding deals and getting gift ideas.
McKinsey said retailers should ensure that their products, pricing and information are easy for AI tools to understand as consumers increasingly rely on AI-assisted purchasing decisions.
The report points to a holiday season in which consumers remain willing to spend but are likely to demand greater value for their money. For retailers, winning those shoppers could depend on a combination of competitive pricing, relevant products and visibility across increasingly AI-driven shopping journeys.
