Holiday spending to top $1 trillion for first time, retail group says, but some Long Islanders say they'll cut back

Americans are concerned about tariffs, inflation and the long-running federal government shutdown — and they're pickier about how they shop — but they'll still spend a record amount of money this holiday season, according to a retail trade group.

Nationwide, holiday retail sales are expected to exceed $1 trillion for the first time, according to the National Retail Federation's forecast released Thursday. Some Long Island shoppers, however, said they plan to cut back on holiday spending this year.

Nationwide, consumers are cautious while "fundamentally strong," said Matthew Shay, president and CEO of the Washington, D.C.-based trade group.

Consumers are "sharing with us their attitudes and their sentiments, which … by historic standards, continue to be very, very low," Shay told journalists during a media call Thursday. "Yet they continue to spend and power the economy.”

Retail spending during the holiday period — November and December — is forecast to rise between 3.7% and 4.2%, to between $1.01 trillion and $1.02 trillion, compared with the $976.1 billion spent during the two-month period last year, according to the federation, whose data excludes gasoline, auto and restaurant sales. The projected spending amounts are not adjusted for inflation.

Last year, retail sales nationwide in November and December grew by 4.3%, compared with the two-month period in 2023.

Not only are shoppers expected to spend cautiously and look for more deals from retailers this holiday season, but also a growing number will wait until Thanksgiving weekend to try to find the best deals, the federation said.

The number of retailers offering discounts this holiday season will likely be similar to the number last year, but the price cuts won’t be as steep, Mackenzie Shand, executive editor at BlackFriday.com, a website that features Black Friday sales, wrote in an email.

“We anticipate that discounts will be smaller this holiday season, as many companies’ prices have been impacted by tariffs. … Most retailers participate in major sales events like Black Friday annually, and while the discount and selection might be smaller, there will still be participation in the saving event,” she said.

Price-sensitive gift buyers will cut spending on nonessential goods and services, such as recreation or dining out, in order to save money that will be spent on presents for the holidays, Mark Mathews, the federation’s chief economist and executive director of research, said during the media call.

“We expect them to continue to prioritize spending on loved ones, spending on families. And if that costs more, then they’re going to make savings in other areas of the economy,” he said.

A challenging season for some

On Long Island, some shoppers plan to cut back on holiday spending this year.

Stacey Thompson, 51, of Levittown, has reduced her spending throughout this year amid rising costs, and plans to continue her cost-cutting through Christmas, she said Thursday.

“I would rather do something like have a big dinner or more family time or friend time than buying an actual gift,” she said.

Pat Bosco buys Christmas gifts for her family, including two adult children, and there won’t be much of a change in her spending for the holiday, the married Lake Grove resident said.

“It’s once a year and I’ll try and save [in other ways] to do that,” Bosco, 68.

Some Long Island retailers are bracing for a challenging holiday season amid tariff-related price hikes.

Tariffs on diamonds and other imported materials, and the high price of gold, have hiked up wholesale expenses for Patchogue Jewelers, while its customers contending with the rising costs of goods are more often choosing to bring their old jewelry to the store for repairs rather than buy new items, said Liliana Martinez, who co-owns the 10-year-old store with her husband, Richard.

Patchogue Jewelers’ sales were down 35% in the third quarter compared with the same period last year, and the holiday season, which is normally a busy period for the store, is going to be a challenge this year, she said.

“I think it’s going to be a struggle. I think it’s not going to be an easy season,” Liliana Martinez said.

On Long Island, residents are more pessimistic about their financial future, with consumer sentiment in Nassau and Suffolk counties in September falling to 65.1 points, the lowest level since June 2023, when it was 61.2, according to the Siena Research Institute.

Nationwide, consumer confidence fell to 53.6 points in October, down from 55.1 in September and below October 2024’s 70.5, according to the University of Michigan’s Survey of Consumers.

Several other projections from retail and economic research groups also are predicting a slowdown in holiday spending this year.

Real holiday sales, meaning the spending is adjusted for inflation, are expected to rise 3.2% this season, according to S&P Global Market Intelligence, a Manhattan-based financial analysis provider.

The Mastercard Economics Institute is forecasting that retail sales in November and December will grow 3.6%, compared with the same two-month period last year.

Mastercard “believes inflation will make a larger contribution to overall sales growth than it did during the 2024 holiday shopping season, in part reflecting tariffs,” the institute said in a September report.

The timing of Thanksgiving also could be a factor in holiday shopping, since the holiday will fall on Nov. 27, Mastercard said. That is the second-latest possible date for the holiday, which will shorten the period between Thanksgiving and Christmas.

“This could boost online sales at the beginning of December and spur retailers to start promotions earlier than usual,” Mastercard said.

Tariffs are the main reason that inflation has begun to creep up again in the past few months, though retailers have been reluctant to pass those higher costs on to their customers for most of the year, said Adam Kamins, senior regional economist at Moody’s Analytics, an economic research provider whose parent company is headquartered in Manhattan.

“But firms can only swallow those cost increases for so long. So more of those are being passed along to customers,” he said.

Newsday's James T. Madore contributed to this story.

By Tory N. Parrish

tory.parrish@newsday.comToryParrish1

Tory N. Parrish covers retail and small business for Newsday. She has worked at the Pittsburgh Tribune-Review and Observer-Dispatch in Utica, N.Y.