EY-Parthenon Consumer Sentiment Survey finds that holiday spending remains resilient despite affordability pressures

Sixty-two percent of consumers plan to spend an equal amount or more on gifts vs. last year, afforded by promotions, debt and discretionary pullbacks, as the EY-Parthenon team forecasts a 5.2% rise in US retail sales during the Nov–Dec holiday season, the strongest sales growth in five years.

NEW YORK, Oct. 29, 2026 /PRNewswire/ -- Today, the EY-Parthenon practice released the holiday edition of its Consumer Sentiment Survey, which finds that consumers continue to prioritize holiday spending despite concerns about affordability and the broader economic outlook. The survey finds that consumers are increasingly funding holiday purchases by cutting back on discretionary outlays and focusing on promotions and sales. Nearly half of consumers are cutting back on spending at restaurants and on entertainment, while one in three are cutting back on purchases of electronics and travel. A quarter of consumers are waiting for promotions and sales.

"Consumers are making discretionary trade-offs and starting their holiday shopping earlier to spread purchases, take advantage of promotions and manage ongoing financial pressures," said Mark Chambers, EY Americas Retail Sector Leader. "That behavior is reshaping the holiday season, with retailers competing to introduce promotions earlier and consumers increasingly looking for value well before traditional holiday shopping peaks."

While 42% of consumers are more stressed about affording holiday gifts than they were last year, nearly two-thirds (62%) expect to spend roughly the same amount or more on holiday gifts this year, and 81% plan to buy gifts for about the same number of people or more than they did last year.

Strongest holiday sales forecast in five years

The broader economic outlook suggests another strong holiday season for retailers. The 2026 EY-Parthenon holiday retail forecast predicts a 5.2% increase in US holiday retail sales to $1.08 trillion during the Nov–Dec shopping season, marking the strongest holiday sales growth since 2021. Strong household balance sheets, low unemployment and accumulated wealth continue to support spending, even as consumers remain dissatisfied with the cost of living. This tension between economic caution and spending resilience is defining the 2026 holiday season.

"While consumers remain supported by healthy balance sheets, accumulated wealth and low unemployment, ongoing inflationary pressures are eroding purchasing power and weighing on consumer sentiment," said Gregory Daco, EY-Parthenon Chief Economist. "This tension will require retailers to be particularly conscious of pricing, promotions and inventory management to navigate a highly uncertain economic landscape this holiday season."

Self-gifting gains momentum as consumers seek small indulgences
Even amid continued economic uncertainty, many consumers are finding room in their budgets for purchases that bring personal enjoyment. More than four in 10 consumers (41%) plan to purchase a holiday gift for themselves this year, and even higher for younger generations (53% of respondents 19–34 years of age). As consumers look for affordable ways to celebrate and reward themselves, smaller discretionary purchases continue to provide an accessible form of indulgence.

Physical gifts preferred to experiences
As shoppers seek to maximize value and make holiday budgets go further, tangible gifts are holding greater appeal than experience-based purchases, despite popularity in recent years. More than half of consumers (51%) plan to prioritize physical gifts this season. Meanwhile, just 21% intend to gift experiences. The preference reflects broader pullbacks across restaurants, entertainment, personal electronics and travel.

Promotions and value remain central to holiday spending decisions
As affordability concerns persist, consumers are becoming increasingly strategic about when, where and how they shop. More than one-quarter (27%) of consumers say waiting for promotions or sales will be their primary strategy if holiday prices increase. While cash and debit cards remain the preferred payment methods, 14% of consumers expect to carry holiday-related debt into 2027, and 69% of those respondents expect to pay it off through spring 2027, underscoring ongoing financial pressures.

"Brands and retailers have an opportunity to help shoppers maintain holiday traditions while navigating ongoing cost pressures," said Will Auchincloss, EY-Parthenon Americas Retail Sector Leader. "Retailers can meet those expectations by emphasizing value, offering assortments across a range of accessible price points and bringing promotional activity forward to engage shoppers earlier in the season."

Learn more about the EY-Parthenon Consumer Sentiment Survey at Consumer Sentiment Survey | EY - US 

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Methodology  

Wave 7 of the EY-Parthenon US Consumer Sentiment Survey includes responses from more than 1,500 US consumers, representing a broad cross-section of the general population. The survey examines consumer financial confidence, spending and savings behavior, category-level spending trends, retail preferences and broader economic sentiment. The survey is conducted bimonthly to assess how consumers' priorities and purchasing trade-offs evolve in response to changing economic and geopolitical conditions.

The views reflected in this article are the views of the author(s) and do not necessarily reflect the views of Ernst & Young LLP or other members of the global EY organization.

Caroline Acton 
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