U.S. retailers wrapped up the 2025 holiday shopping season with moderate sales growth, offering cautious optimism after months of economic uncertainty. While gains weren’t dramatic, many merchants said results were better than feared, helping ease concerns about consumer demand heading into 2026.
Industry reports showed that holiday sales didn’t soar to record levels, but they did outpace some analysts’ expectations. For brands and merchants watching consumer spending closely, the outcome signalled resilience in the retail sector even if shoppers remained selective with their purchases.
Some department stores and specialty chains reported better-than-expected foot traffic and online engagement, particularly in early December. Sales strength was uneven across categories, with apparel, accessories and beauty performing more steadily than luxury goods or big-ticket electronics.
Retailers attributed the middling gains to several factors shaping consumer behaviour this year. Persistent inflationary pressures, mixed employment trends and caution around discretionary spending led many shoppers to prioritise essentials or value-oriented purchases. Even so, promotional efforts helped drive traffic and clear inventory as the season progressed.
Discounts and deals especially during Black Friday and Cyber Week sparked early transactions, but many retailers said shoppers did not accelerate spending as strongly in late December as they had hoped. Holiday shopping windows have become longer in recent years, and this trend appeared to continue, spreading out purchases rather than concentrating them in a final surge.
E-commerce remained an important channel, with many brands noting growth in online orders, click-and-collect services and digital engagement. However, conversion rates varied, and some merchants said higher cart abandonment pointed to lingering caution among buyers who compared prices or waited for deeper discounts.
Store executives generally described the results as “respectable” rather than spectacular. For many, the priority was avoiding sharp downturns after slower quarters earlier in the year. In that context, reports of flat or slightly positive performance were seen as a sign of stability, even if they fell short of pre-pandemic holiday growth patterns.
Some sectors showed pockets of strength. Affordable fashion and everyday wear resonated with cost-conscious shoppers, and value brands reported steady interest throughout the season. Beauty products often seen as popular gift items also helped bolster sales for select retailers.
Luxury and high-end merchandise, however, posted more mixed results. While top-tier brands continued to attract affluent buyers, traffic in flagship locations and high-price categories was not as brisk as some had anticipated, prompting cautious introspection among luxury marketers.
Merchants also pointed to broader economic signals that may have shaped holiday behaviour. Consumer sentiment surveys earlier in the season indicated that many households were watching budgets closely, despite stable employment figures. Savings habits and borrowing costs appeared to influence when and how much shoppers were willing to spend.
Retail analysts noted that while the results are not cause for celebration, they offer a foundation of confidence as retailers plan for 2026. With inventory levels generally under control and promotions having successfully driven traffic, many companies enter the new year with clearer expectations about demand and pricing pressures.
Looking ahead, merchants are planning for continued emphasis on digital tools, loyalty programmes and personalised marketing to sustain engagement beyond peak seasons. Innovations in fulfilment such as expanded pickup options and smoother returns are also priorities as shoppers expect convenience alongside value.
Retailers that leaned into storytelling, exclusive collaborations and curated selections reported relatively stronger connection with customers, suggesting that experience and brand narrative remain important even when budgets are tight.
For many executives, the holiday results underscore the evolving nature of consumer behaviour one shaped by prudence, digital engagement and an appetite for value balanced with occasional indulgence. While the gains this season didn’t reach historic peaks, retailers are taking comfort in solid, broad-based performance that avoided steep declines.
In short, the 2025 holiday retail season delivered modest but meaningful growth, allowing retailers to close the year on a stabilised note and enter 2026 prepared for continued shifts in shopping habits and competitive dynamics.
