What Could a ‘Two-Speed’ Christmas Look Like for Shoppers and Retailers This Year?

The holiday season could prove to be merry and bright for many retailers this year, with forecasts from NRF (forecasting retail sales up 4.2% to $1.013 trillion, with a significant proportion of the increase linked to inflationary pressure) and Mastercard Economics Institute (projecting growth of 5.5% in holiday spend, with about half of that tied to price inflation) showing solid signals for a healthy spend.

And now a recent report issued by A&M Consumer and Retail Group surveying 2,055 U.S. shoppers on their holiday shopping intentions dives a bit deeper, offering some granular insights for analysis.

First up, the top-line figures. Total holiday spending intent is at a -14% net-more, which is an 11-point shift from the -3% observed by last year’s findings. Researchers outlined a “two-speed holiday” situation coming into stark relief for Christmas 2026, with higher-income households exhibiting vastly different shopping intent versus lower-income households. Here’s how that looks broken down:

• Higher-income households intend to spend more on every category than last year, except decorations: On a net-more basis, higher-income households are ramping up total holiday spend (+18% say they plan to spend more than in 2025), gifts for others (+15%), holiday meals and treats (+21%), entertainment (+13%), increasing the number of gift recipients (+5%), number of gifts total (+7%), travel (+17%), and gifts for themselves (+4%). Wealthier households are more likely to say they are cutting back on decorations, however (-4%).

• Lower-income households cutting back on every front this holiday season, stats suggest: By contrast, on a net-more basis, lower-income households intend to curtail holiday spending on the whole (-26% said as much versus 2025), gifts for others (-16%), holiday meals and treats (-19%), entertainment (-29%), the number of gift recipients (-26%), travel (-36%), number of total gifts (-31%), gifts for themselves (-34%), and decorations (-43%).

Forecasts Align on Dollar Spend, But Figures Show Divergence in Gifting (and ‘Urgency’ of Purchase)

A&M also was careful to point out that these figures actually do agree with the aforementioned industry forecasts, among others, on the 4%-5% holiday sales growth expectations. “Dollars are likely to rise with prices and affluent spending, even as most households plan to do less,” the report read.

“Yet when a desired gift is running low, urgency wins. More consumers would buy immediately to avoid missing out (37%), while fewer would wait for a sale. Higher-income shoppers are especially decisive, while lower-income shoppers are more likely to look for an alternative. For retailers, in-stock position on key items may matter as much as price this season,” the report authors stated.

“Gifting preferences split by life stage and income. Physical gifts are the most common choice (48%), but gift cards appeal more to older and lower-income shoppers, while experiences resonate with younger and higher-income consumers. Channel plans lean digital, with more consumers planning to shop online than in-store,” they added.

Questions for further discussion:

• Do you believe the “two-speed” or K-shaped Christmas will be in evidence this holiday season, as the data indicates? Why or why not? What other signs do you personally see to back up your thoughts on the subject?

• What should retailers do both to satisfy the seeming willingness of higher-income households to ramp up spending while also addressing lower-income households pulling back from holiday spend – at least in terms of expressed intent? Is there a solution to this balancing act, or will some retailers be forced to lean heavily in one direction or another – any examples come to mind?

• Are there any findings presented within the report that you find suspicious, or off-base?