For the first time ever, American holiday spending is expected to cross the $1 trillion threshold. It's a historic moment, the kind of round number that makes for excellent headlines. But before anyone breaks out the champagne, there's some context worth considering.
Total sales for November and December 2025 are projected to land between $1.01 trillion and $1.02 trillion, marking a year-over-year increase of 3.7% to 4.2%, according to the National Retail Federation. On paper, that sounds impressive. In practice, it's more complicated.
When Growth Isn't Really Growth
Here's the thing economists want you to know: these gains are largely what they call "nominal." That's finance-speak for numbers that look bigger but don't necessarily mean more stuff is being bought.
The surge is primarily fueled by inflation and tariff-related price hikes rather than consumers actually purchasing more goods. With retail price inflation running around 2-3% and new trade policies pushing up costs on imported toys and electronics, many shoppers are essentially paying more for the same items, or even fewer items than before.
The Tale of Two Shopping Experiences
This holiday season is revealing a sharp divide in how different economic groups are approaching their spending:
- High-Income Resilience: Affluent households continue spending with confidence, buoyed by stock market gains and rising home equity values.
- Lower-Income Squeeze: Budget-conscious consumers are displaying what analysts describe as "resilient caution." The growing reliance on credit cards and the expansion of Buy Now, Pay Later services tells the real story—many shoppers are stretching their budgets to the absolute limit just to participate in the season.
Winners and Losers Among Retail Giants
| Retailer | Performance & Outlook |
| Walmart Inc. (WMT) | The clear winner this season. Walmart's "value-plus" strategy combined with AI-driven logistics has allowed it to capture market share from competitors at both ends of the spectrum. |
| Amazon.com, Inc. (AMZN) | Dominated the "Cyber Five" period with record digital sales. Amazon's growth is being powered by high-margin advertising revenue and AI-integrated shopping tools. |
| Costco Wholesale Corp. (COST) | Holding steady as a defensive growth play. Members are increasingly leaning into bulk buying strategies to offset the impact of inflation. |
| Target Corp. (TGT) | Struggling to find its identity. Target has experienced declining comparable store sales as it loses price-sensitive customers to Walmart and convenience-focused shoppers to Amazon. |
Despite reaching a record-breaking total, the 2025 holiday season demonstrates that American consumers are still willing to open their wallets—but they're doing so with much greater precision. The value-driven giants are winning big, while retailers caught in the middle are getting squeezed out. It's a trillion-dollar milestone, sure, but one that reveals as much about economic inequality and inflation pressures as it does about consumer confidence.