US holiday retail sales are expected to reach at least $1.7 trillion this year, according to Deloitte's annual holiday retail forecast, with year-over-year growth of between 2.9% and 3.4%. The projection points to a record total but a slower rate of expansion than in 2024, when sales grew by 4.2%.
The forecast covers the November-to-January period and is closely watched by retailers, investors and economists as a gauge of consumer confidence. Deloitte's estimate suggests households remain willing to spend through the most important trading quarter of the year, even as the pace of growth moderates from last year's stronger figure.
The expected slowdown reflects a consumer base that is still spending but with less momentum than a year ago. Retailers have been navigating a landscape of uneven demand, with lower-income households under pressure from higher borrowing costs and prices, while wealthier shoppers continue to support premium categories. The holiday season will test whether those diverging trends persist.
Deloitte's forecast is one of the first major indicators for the 2025 holiday shopping period. It lands as retailers finalise inventory plans, staffing levels and promotional calendars. A growth rate in the low single digits would still represent a substantial volume of trade, but it would require chains to compete harder for a share of household budgets that are not expanding as quickly as in previous years.
The forecast does not break down spending by category or channel, but the overall figure underscores the continued dominance of the year-end period in US retail. For many chains, the final two months of the year account for a disproportionate share of annual revenue and an even larger share of profit. A slower growth rate therefore matters less for the absolute size of the prize than for the intensity of competition to capture it.
Retailers have already signalled that they expect a value-conscious shopper. Discounting has been widespread in the run-up to the season, and several major chains have highlighted the need to keep prices competitive. The Deloitte forecast is consistent with that picture: consumers are still spending, but they are doing so more selectively and with greater attention to price.
The National Retail Federation has not yet released its own holiday forecast, but Deloitte's number sets a benchmark against which other projections will be measured. Last year, holiday sales beat many forecasts, helped by a resilient labour market and steady wage growth. This year, the same supports are present but weaker, and the forecast reflects that.
For retailers, the challenge is to convert a record total into profitable growth. Higher operating costs, including wages and logistics, have squeezed margins across the sector. A slower sales increase means that efficiency and inventory discipline will be as important as top-line performance. Chains that misjudge demand could be left with excess stock and forced into deeper markdowns in January.
The forecast also carries implications beyond the retail sector. Holiday spending is a key input for fourth-quarter GDP estimates, and a weaker-than-expected season could weigh on broader economic sentiment. Conversely, if sales come in at the upper end of Deloitte's range, it would reinforce the view that the US consumer remains a stabilising force for the economy.
Deloitte's projection is based on its own economic modelling and is released each autumn. The firm's forecast range of 2.9% to 3.4% growth places the season in line with a moderate expansion rather than a boom. That may be enough to keep retailers on track, but it leaves little room for error in a market where shoppers have become more deliberate about where and when they spend.