Here's Visa's take on the upcoming holiday shopping season: consumers are resilient, but remain cautious and will dole out more money this year than they did last year.
As a result, the company's Visa Business and Economic Insights (VBEI) team expects U.S. holiday retail sales to see a 4.5 percent year-over-year in November and December, which would be the strongest growth since 2021.
More from WWD
Much of that year-over-year growth is expected to reflect higher prices instead of an increase in purchasing activity. The report's authors said inflation this year will have two key effects on holiday spending. "First, the higher cost of holiday travel may shift some demand from travel-related spending to physical gifts," the report noted. "Additionally, higher inflation will inflate holiday spending."
The VBEI researchers said they expect consumer prices for holiday-related goods will increase 3.4 percent this season, year-over-year. "There is also one more shopping day this season compared to last year, which will provide a slight tailwind for sales," they said. "But there may be fewer shoppers dashing through the stores for retailers. After accounting for inflation on holiday items, real spending—a good proxy for foot traffic—is expected to rise just 1.1 percent this year, down from the 1.3 percent that occurred last season."
Visa's forecast, released today, echoes the estimates other firms are noting in their reports. Major economic forecasters and industry groups anticipate a solid, albeit bifurcated, 2026 holiday shopping season. Overall retail growth is projected to hover between 4 and 4.8 percent. The National Retail Federation (NRF) projects November and December retail sales will climb 4.2 percent year-over-year to more than $1 trillion.
Meanwhile, Deloitte expects total holiday sales to land between $1.7 trillion and $1.71 trillion, a 4 to 4.8 percent increase. This growth is driven largely by higher-income households and younger demographics prioritizing value and experiences. On the e-commerce front, Adobe forecasts digital sales to surge 6.7 percent to a record $275.1 billion. Deloitte estimates an even wider online expansion between 7.5 and 8.4 percent, highlighting an ongoing consumer shift toward aggressive online promotions and digital value-seeking.
"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. "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."
In the Visa report, the data showed nuances in consumer sentiment, such as the impact of travel costs. The report's authors said shoppers are dreaming of travel "but spending on gifts, with more than half of shoppers putting travel and live events at the top of their wish lists." However, only 15 percent of those polled said they are prioritizing spending on experiences, which compares with 27 percent prioritizing physical gifts.
"With travel costs high, Visa's economists say dollars that might have gone toward holiday trips could flow into merchandise instead, which could work in retailers' favor," the report noted.
Looking at spending on gifts, the report's authors said shoppers plan to spend an average of $777 on gifts this season, which is up 5.6 percent from $736 in 2025. For households earning over $200,000 the researchers found they were the only income group to increase both holiday airfare bookings and spending in September—with trips booked up 29 percent, and spending up 38 percent. For those earning under $100,000, one third of that group said they plan to switch to lower-cost brands or stores for holiday gifts.
The report's authors said shoppers remain attentive to prices, reinforcing a holiday season that is defined by both a willingness to spend as well as a continued focus on value. "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."
For retailers and brands, Visa's insights signal a need to balance compelling value propositions with strategic inventory positioning to capture both resilient high-income spenders and budget-conscious shoppers.
Merchants should also lean into merchandise promotions while offering tiered pricing options, such as lower-cost brand alternatives, to retain price-sensitive consumers earning under $100,000. Additionally, given the robust growth projected for e-commerce, brands must optimize their digital storefronts and promotional strategies to capture strong online demand.
Best of WWD
