The Mastercard Economics Institute (MEI) has released its 2025 U.S. and Canada holiday forecast , and while festive spirits are high, spending will be shaped by inflation, tariffs, and consumers’ drive for smarter, value-based choices. The report, published on September 22, 2025 , anticipates total U.S.
retail sales (excluding autos) to rise 3.6% year-over-year from November 1 to December 24 , while Canadian retail growth is expected at 2.8% . Within that, U.S. online sales are forecast to grow 7.9% , far
outpacing brick-and-mortar’s 2.3% growth , underscoring the continued strength of e-commerce. “ Consumers will continue spending with holiday sales o f 3.6% yoy. E-commerce will continue to drive the growth as consumers look for deals, ” said Michelle Meyer , Chief Economist at MEI.
Inflation, Mastercard’s analysts note, will fuel a larger share of the spending increase than raw sales volume itself.
Tariffs on goods such as clothing, toys, and décor are adding complexity to pricing, forcing retailers to decide whether to absorb costs or pass them on to consumers, creating highly competitive pricing battles across sectors.
Shopping Smart: Budgets, Gift Cards, and Flexibility When prices rise, shoppers adapt, and in 2025 , that means gift cards are back in fashion . MEI observes that gift card usage will surge sharply this year as buyers seek ways to maintain generosity without overextending budgets…
