Higher costs weigh on Americans' holiday shopping plans this year: CNBC survey

A CNBC/SurveyMonkey poll of more than 2,000 U.S. adults (Nov. 14–17) finds nearly 80% say things are more expensive and 40% plan to spend less this holiday season; among those cutting back, 60% will buy fewer gifts for others and roughly half will reduce dining out, self-gifting, big-ticket and entertainment spending. Tariffs prompt 40% to plan lower holiday spending (39% report no impact), and while 82% still plan to shop this season they largely intend to do so outside Thanksgiving weekend; Small Business Saturday is limited by low local awareness (41%) and higher sticker prices (25%). The data point to downside risk for holiday sales and margins—particularly for discretionary and small-business retailers—and show younger cohorts (Gen Z and millennials) are more likely to rely on budgets, which could depress demand in key categories.

Analysis

Market structure: The survey (≈2,000 adults) shows 40% plan to cut holiday spending and 60% of those will cut gifts — a concentrated hit to discretionary, gift-oriented categories (apparel, department stores, dining, entertainment). Winners are low-price and off-price retailers (WMT, COST, TJX), grocers and private-label brands that capture shifted spend; losers are mall-based department stores, casual dining and experiential venues. The shift away from heavy Black Friday/Cyber Monday concentration (82% shopping outside major deal days) flattens promotional peaks and favors omnichannel players with steady inventory and logistics.

Risk assessment: Near term (days–weeks) monitor Black Friday weekend traffic and same‑store sales; a downside surprise would amplify margin guidance cuts. Medium term (months) risks include tariff escalation or a sharper consumer credit deterioration (card delinquency uptick >25 bps would materially reduce discretionary spend). Tail risks: recession-driven unemployment spike or tariff shock causing SKU-level margin hits and large inventory markdowns across retailers. Hidden dependencies include gift‑card flows, BNPL usage and last‑mile shipping constraints that can mute online conversion.

Trade implications: Position overweight discount/off‑price retail and defensive staples, underweight mall departments, restaurants and leisure. Cross-asset: weaker holiday demand is disinflationary — positive for 2–10y Treasuries and negative for oil/industrial metals in 1–3 months if CPI prints soften. Option strategies: buy short-dated puts on department stores and buy call spreads on off-price/discount names ahead of holiday sales windows to capture upside with defined risk.

Contrarian angles: Consensus underestimates catch-up buying — big-ticket deferrals could boost early‑Q2 2025 durable goods, so avoid permanently writing off home improvement names (LOW, HD). Small Business Saturday weakness is often awareness-driven, not demand-driven — invest selectively in commerce/payment enablers (SHOP, SQ) that turn local discovery into transactions. Historical parallel: 2010–2013 saw secular share gains for value retailers after episodic consumer squeezes; expect similar multi-quarter outperformance for winners.

Key Decisions for Investors

• Establish a 2.5% portfolio long in TJX (TJX) ahead of holiday-week performance; target +8–12% upside in 3 months, set stop-loss at -6% to capture share gains from bargain-seeking shoppers.
• Initiate combined 1.5% short exposure to mall-based department stores: short Macy's (M) 0.75% and Nordstrom (JWN) 0.75% or buy 3-month 25–30% OTM puts; expect 20–40% downside if holiday comp/guidance misses, stop-loss +8%.
• Conditional duration trade: add 3% allocation to 10‑year Treasuries (buy TLT or 10y futures) if Dec CPI y/y < 3.2% or Black Friday aggregate sales < consensus by >3% (trigger window: next 6 weeks); trim if CPI > 4.0%.
• Buy a 0.5–1.0% notional 1–3 month call spread on Walmart (WMT) or Costco (COST) (5–10% OTM) to play share gains and stretched promotional cadence; close after the first post‑holiday earnings or at +50% premium.