‘Tis the Season for Tightening Wallets: Consumers are Expected to Spend Less

As the days drift through September, the golden glow of summer wanes into a fiery pop of color as leaves change. While vibrant hues entice consumers to take a walk through the not-yet crisp air, retailers are looking ahead to the holiday shopping season with some trepidation. According to a recent study of 4,000 U.S. shoppers, consumers are expected to spend less this holiday season, particularly younger generations. 

The survey observed an expected 5.3% YOY (year-over-year) drop in the last months of 2025, with the biggest predicted spending decline attributed to Gen Z, who said they would spend 23% less than last year. This contrasts with their optimism in 2024, where they expected to spend an additional 37% from 2023.  

Gen Z is a generation focused on experiences; providing more experiential shopping could be the drive behind brands like Starbucks bringing out their fall menus earlier this year, capitalizing on the media-savvy Zoomers’ excitement for pumpkin spice and other trends. So why the expected decline this year? 

Falling Leaves, Falling Optimism 

Both retailers and consumers are facing new pressures this year. Many retailers are navigating increased costs as they sell out their pre-tariff stock and prepare to pass on raised prices to consumers. Some are limiting the options in their inventory to save costs and preparing to have smaller sales. This doesn’t apply just to gift-list items, but other holiday staples like décor.  

Consumers are feeling uncertain, as if waiting for an impending storm. According to a Bank of America survey, only 47% of employed respondents felt they had financial well-being. This is a 5% drop from the outlook at the beginning of the year. Along with feeling financial stress and rising personal debts, 77% of those surveyed reported being worried about the economy. When consumers are worried, it shows in their purchasing habits.  

Tariff prices haven’t hit the shelves everywhere, but it is the knowledge that they could hit, and soon, that leads to consumer wariness and extra price sensitivity as they wait for the right moment to purchase things on their lists. This is compounded by changing tariff news, as different categories or countries face changing tariff rates mixed with tariff pauses, adding to the uncertainty. Shoppers are already feeling strained with consistently rising grocery prices, trading name brands for private label or knock-off brands and pricier proteins like beef for chicken.   

What Should Consumers Do? 

Consumers should be aware of these changes in the market and how they could affect them personally. Pay attention to brands and products you are interested in; sales may start earlier this year for some items, while others may not end up on sale at all. Focus on prioritizing what’s most important for you and your pets and recognize that some years the economy is just leaner than others. Understand that some essentials may have fewer choices and higher prices, and prepare for increased costs now, so you don’t face sticker shock during the holiday season.  

Consider shopping in-store for your pets’ needs. While online shopping may feel more convenient, well-informed retailers can help you find products that most closely align with your top priorities, including introducing you to new brands and products you may currently be unaware of. Shopping less or cheaper doesn’t have to mean sacrificing the health or well-being of you or your pets, or even the fun of discovering new products.  

What Should Brands Do? 

While this season may seem like there’s a blood bath to fight for every consumer dollar, ensure you know who you are marketing toward and target them effectively. Gen Z has battened down the money hatch, and brands will have to work extra hard to fight for every dollar of theirs. In contrast to younger generations, Baby Boomers are expected to spend a little more this year, so ensure you are reaching them through the right channels. 

If you are facing rising costs from tariffs, be strategic in what products you stock and mindful of how you price things, considering if there are any costs you are willing to absorb. While some brands are raising prices, others are cutting them, prioritizing driving traffic. 

BSM Partners can help your brand strategize everything from inventory to manufacturing to marketing to help you navigate the economy and satisfy your customers. Reach out today to learn more about how we can help you succeed. 

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About the Author

Kait Wright is a Senior Analyst at BSM Partners in the Branding, Strategy, and Marketing practice. She has over five years of experience in consumer insights and market research and has worked in both the human and pet food industries. She has volunteered with a local TNR program, domesticating and fostering feral kittens. She earned her B.S. from Brigham Young University and lives in Utah with her two cats.