• Holiday retail spending proved resilient in 2025 despite rising consumer caution, price sensitivity, and debt pressures.
• Nearly 203 million U.S. shoppers engaged across stores and websites from Thanksgiving through Cyber Monday, the highest level in nearly nine years.
• Value-driven formats and promotions captured outsized demand as consumers traded down and concentrated spending around peak events.
• AI-powered shopping tools played a meaningful role in purchase decisions, driving faster conversion during high-intent moments.
• Rising household debt and greater reliance on financing introduce potential headwinds for retail performance in early 2026.

Holiday retail spending remained steady in 2025, even as consumers entered the season more cautious and budget-conscious. U.S. holiday retail spending rose 4.2% year over year (not adjusted for inflation), with growth driven more by pricing and promotions. E-commerce sales increased by 7.8%, although physical stores still accounted for nearly three-quarters of total holiday expenditures. This trend underscores the ongoing importance of brick-and-mortar stores during peak shopping moments. Shoppers continued spending, but with greater selectivity, heightened deal-seeking behavior, and greater reliance on buy-now, pay-later options.

Digital engagement accelerated during the holiday season, with AI playing a significant role in shaping Black Friday shopping behavior globally. AI agents influenced an estimated $14.2 billion in online sales worldwide, including $3 billion in the U.S., as shoppers leaned on AI-powered recommendations, conversational gift finders, and automated price comparisons to navigate higher prices and flatter discounting. Inflation, tariffs, and rising product costs limited retailers’ ability to offer deeper markdowns. This contributed to a 1% decline in order volumes and 2% fewer items per transaction, even as average selling prices rose 7%. As a result, AI emerged as a critical tool for consumers seeking value amid a weakening of Black Friday’s traditional bargaining power.

Meanwhile, although overall U.S. foot traffic declined, many top-tier malls saw increased store visits, benefiting from strong merchandise curation, convenience, and a value proposition that made them “worth the trip,” highlighting how quality tenancy and experience continue to differentiate leading retail centers.

Colliers Insight

Share this with your followers

At the same time, value and experience emerged as parallel drivers of performance, while discount and off-price retailers captured market share as consumers traded down on low-priority items. Experiential retail, nostalgia-led campaigns, and in-store activations also helped drive foot traffic and emotional engagement.

The season reinforced a clear takeaway for investors and owners: tenant mixes that balance value retail, experiential concepts, and digitally-enabled brands are best positioned to capture spending during high-intent moments in an increasingly selective consumer environment.