Visa Forecasts 4.5% Surge in 2026 U.S. Holiday Spending as Consumers Prioritize Physical Gifts

Quick Summary

Visa forecasts that U.S. holiday spending will rise 4.5% in 2026, marking the strongest growth since 2021. Despite high travel costs, consumers are prioritizing physical gift merchandise over experiences, with average gift budgets increasing to $777 as resilient income growth supports healthy retail performance.

How is U.S. Holiday Spending Changing in 2026?

The 2026 holiday season is expected to see a significant 4.5% year-over-year increase in retail sales, driven by solid income growth and household wealth. While inflation remains a factor, with prices for holiday goods expected to rise by 3.4%, the inflation-adjusted spending is still projected to grow by 1.1%. This indicates that U.S. holiday spending remains a top priority for households across the country.

• Average gift spend: $777 per consumer (up 5.6% from 2025).
• Retail sales growth: 4.5%, the highest since 2021.
• Real spending increase: 1.1% after adjusting for inflation.

Why are Consumers Prioritizing Physical Gifts Over Travel?

While more than half of shoppers dream of travel and live events, high travel costs are shifting actual spending toward physical retail merchandise. Visa's data shows that only 15% of consumers are prioritizing experiences, while 27% are focusing their budgets on traditional holiday gifts. This shift is particularly evident in middle-to-low income brackets, where airfare booking volume has pulled back sharply compared to high-income households.

• Experience priority: Only 15% of shoppers.
• Physical gift priority: 27% of shoppers.
• High-income travel: Households earning $200k+ saw a 29% increase in bookings.

How are Value-Conscious Shoppers Adapting to Higher Prices?

Despite the willingness to spend, consumer value-consciousness remains a defining trait of the 2026 season. Approximately one-third of consumers earning under $100,000 plan to switch to lower-cost brands or discount stores to stretch their holiday budgets. This deliberate spending choice ensures that while total volume increases, retailers must compete aggressively on price and value to capture market share.

FF NEWS TAKE:

Visa's outlook proves that U.S. holiday spending is decoupled from the 'experience economy' hype when travel costs become prohibitive. This is a massive win for traditional retail and e-commerce, as 'stay-at-home' holiday budgets flow into physical goods. For fintechs, the focus should be on flexible payment options and loyalty tools that help value-conscious shoppers manage a record-breaking $777 average gift spend without breaking the bank.