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Investing.com -- Holiday spending is set to rise this year, but at a slower pace, according to BMO Capital’s 2025 Internet Proprietary Holiday Survey, which polled roughly 1,000 U.S. consumers.
BMO analyst Brian Pitz said in a note Monday that the results “indicate more muted holiday sales growth,” with just 50 percent of consumers planning to increase spending, down from 62 percent last year.
Another 24 percent plan to decrease spending, a dynamic BMO attributes partly to “a 3.5-year low in consumer confidence” and the possibility of economic boycotts.
The survey suggests shoppers remain resilient but more cautious. BMO noted that 25 percent of consumers plan to significantly increase or slightly increase their spending, compared with 9 percent and 15 percent who expect to significantly decrease or slightly decrease.
Pitz noted that last year, 41 percent and 21 percent planned to increase spending. “Given that November consumer sentiment stood at a 3.5-year low, we are not surprised,” BMO wrote.
Third-party forecasts are said to point to a deceleration in growth, with U.S. retail holiday sales expected to rise 3.6 percent this year versus 4.3 percent in 2024. e-commerce is projected to grow 6.9 percent, down from 8.3 percent.
Still, BMO said there could be “upside to these expectations,” citing year-to-date consumer resilience.
Physical retail reportedly remains the most pressured channel as e-commerce continues to gain share.
Just 44 percent of consumers plan to increase spending in physical stores, compared with 52 percent online. BMO said big-box and off-price retailers screen best among brick-and-mortar formats, while Amazon remains the clear online winner, with “94% of consumers planning holiday purchases on Amazon.com.”
BMO added that despite an extra day between Black Friday and Christmas, the selling season remains shorter than average, prompting 71 percent of consumers to begin shopping before Black Friday.