Consumer spending forecasts for the 2025 holiday season have cooled noticeably since Tea Biz last reported on retail trends in late summer.
Head the Headlines | Seven Minute Tea News Recap
Holiday Retail Sales Expected to Grow Just 2.5%–3%,
By Dan Bolton
Consumer spending forecasts for the 2025 holiday season have cooled noticeably since Tea Biz last reported on retail trends in late summer. Updated projections from the National Retail Federation (NRF) and industry trackers, including eMarketer, show a growing caution among shoppers and sellers alike, marking the weakest seasonal outlook in three years.
The NRF now expects holiday retail sales to grow just 2.5%–3%, down sharply from the 5% pace predicted earlier this year. Persistent inflation, higher borrowing costs, and a cooling labor market—where job openings have fallen to their lowest level since 2021—are eroding consumer confidence. NRF’s chief economist [Jack Kleinhenz] warns that while consumers continue to spend, they are QUOTE “more selective and increasingly value-driven.”
According to Deloitte’s 2025 Holiday Retail Survey, total U.S. holiday spending is projected at $1.56 trillion, up a modest 3.1% year over year, compared with last year’s 5.8% gain. Deloitte also found that 70% of consumers plan to spend the same or less than they did in 2024, as credit-card balances and everyday costs climb.
Nonstore sales, including ecommerce and mail orders, are expected to slow to 7% growth, after two years of 9% to 10%, according to a Bain forecast. D2C’s share of total US ecommerce sales is expected to be 19.2%, according to a May 2025 eMarketer forecast.
For tea merchants, these macro trends translate into a more cautious but still opportunity-rich landscape. Shoppers are expected to seek smaller, meaningful gifts focused on health, comfort, and authenticity—categories where premium tea performs well. Retailers that emphasize craftsmanship, sustainable sourcing, and personal storytelling stand to fare better than those competing on price alone.
Still, analysts warn that the 2025 holiday season will test margins and marketing agility across the beverage and specialty-food sectors. With household budgets tightening and promotions starting earlier than ever, the key to success may be simplicity: clear messaging, curated assortments, and a focus on quality over quantity.
BIZ INSIGHT – Half of all shoppers plan to start buying earlier to spread out costs, according to Price Waterhouse Coopers (PwC) Holiday Outlook. Average US household holiday budgets are projected at $1,595, down 4% from 2024. Together, these findings point to a consumer base more cautious, price-sensitive, and promotion-driven than at any time since the pandemic. These conditions favor “practical gifting” of wellness essentials, such as tea.
- Revised 10/30
Episode 226
