Will retailers and merchants have a strong holiday season? That depends. This year, more than most, the 2025 holiday season will actually be two holiday seasons.<\/p>\n
If your business caters to higher-income individuals or if you\u2019re located in a wealthier part of the country, you\u2019ll probably have a decent holiday season. True, even the wealthy are cutting back. But according to the HR firm ADP average salaries have risen between 4.5% and 6.7% depending on whether workers stayed or switched jobs. The stock markets, though increasingly volatile, are up over 13% since the beginning of the year. And in some parts of the country<\/a>, notably New York, Boston, DC and San Francisco, the average household income is over $125,000 – almost $41,000 higher than the national average. People in this demographic may be a little more cautious but they\u2019ll spend.<\/p>\n Don\u2019t believe me? Just take a walk in or near Soho, Georgetown, Presidio Heights or Beacon Hill. Restaurants selling $49 chicken parms and $16 baked potatoes \u2026 and they\u2019re full. Vegas steakhouses are still getting $165 for a porterhouse<\/a> \u2013 and the tables are packed. I searched for a room recently near Dana Point, California, and the Marriott there was sold out \u2026 at $750 a night!<\/p>\n But for many others? That\u2019s a different story.<\/p>\n Another analysis from the HR giant Paychex reports that<\/a> rises in hourly wages \u2013 those mostly earned by blue-collar workers \u2013 have been tracking below 3% for over a year (it\u2019s currently at 2.58%).<\/p>\n According to Van Hesser, the chief strategist at credit rating analysis agency KBRA<\/a>, the top 10% of earners account for 50% of spending. But the rest? They\u2019re not going to spend as much this year. They\u2019re already riddled with credit card debt. They\u2019re mostly not participating in the stock market boom. They are barely making rent, let alone splurging on holiday gifts.<\/p>\n That doesn\u2019t mean the remaining 90% of the US won\u2019t be visiting stores. But it\u2019s guaranteed that they\u2019ll be spending less. Costs are much higher. Promised tax rebates and pie-in-the-sky \u201ctariff\u201d refunds aren\u2019t happening this year. And with millions losing their jobs this year alone thanks to corporate mismanagement, restructurings, profit-taking and the creepage of AI<\/a>, the next few years are sure to be uncertain.<\/p>\n The annual major surveys of retail sales are telling us just that.<\/p>\n For example, an S&P Global Ratings report expects<\/a> holiday sales (November-December) will grow 4% in 2025 from 2024, but thanks to weaker consumer confidence on the \u201cuncertain macroeconomic outlook\u201d those researchers say that most of these sales increases won\u2019t be volume related, but due to increased prices that actual retail spending when you take out inflation will \u201cremain relatively flat\u201d.<\/p>\n