NextFin news, On Thursday, September 18, 2025, Mastercard issued its holiday spending forecast for the 2025 season in the United States, highlighting a growing consumer preference for gift cards as a response to rising tariffs and inflationary pressures.
The forecast projects a 3.6% year-over-year growth in holiday retail sales (excluding autos) from November 1 to December 24, slightly down from 3.8% growth in 2024. Online sales are expected to increase by 7.9%, while in-store purchases are projected to rise by 2.3%.
Mastercard's chief economist Michelle Meyer explained to Axios that tariffs are increasingly influencing retail pricing strategies and consumer spending behavior. She noted, "Gift givers are going to hunt for value, and a good way to find that is to embrace gift cards because it allows that fixed cost." This fixed cost aspect makes gift cards a tariff-proof option amid rising prices on staples such as toys and Christmas decorations.
The report underscores that tariffs have contributed to higher costs on popular holiday items, prompting retailers to adopt more cautious discounting approaches. Inflation is also creeping back, further pressuring consumer budgets.
Mastercard's forecast defines the holiday shopping season as running from November 1 through Christmas Eve, although some consumers have already begun holiday purchases as retailers launch early merchandise sales.
Major retailers including Best Buy, Target, Amazon, and Kohl's have announced early sales starting in early October, signaling an extended shopping season aimed at capturing cautious consumers.
The shift toward gift cards is significant because they not only help consumers manage spending within fixed budgets but also drive subsequent in-store and restaurant spending when redeemed, potentially boosting post-holiday sales.
Mastercard's forecast and analysis come amid broader economic concerns, including tariff-related price increases and inflation, which are reshaping consumer shopping lists and spending patterns for the 2025 holiday season.
Source: Mastercard holiday spending forecast released September 18, 2025, reported by Axios (https://www.axios.com/2025/09/18/gift-card-holiday-gifts-mastercard-forecast-tariffs)
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