U.S. retail spending increased 4.2% year over year during the holiday season, before adjusting for inflation, according to preliminary data released Tuesday by Visa, signaling shoppers are still willing to open their wallets despite economic anxieties.
Deals Drive Holiday Spending, Even Amidst Consumer Concerns
Despite falling consumer confidence and price worries, shoppers responded to discounts this holiday season, according to Tanger CEO Stephen Yalof.
- Retailers are actively discounting to attract consumers.
- Shoppers are prioritizing value and seeking compelling prices.
- Outlet centers experienced strong traffic throughout November and December.
- Consumer resilience remains a key factor in retail performance.
“Retailers are discounting to meet the consumer, and the consumer is responding by shopping,” Stephen Yalof, CEO of Tanger, said Tuesday. The outlet operator noted that customers are seeking access to premium brands at prices that feel consistently worthwhile.
Yalof described holiday traffic at Tanger’s outlet centers as robust, with parking lots full and consistent activity throughout November and December. He believes the customer is “very resilient” and “looking to spend.”
Retailers across Tanger’s portfolio heavily emphasized promotions during the holidays, which helped maintain both traffic and sales. Customers are “looking to come into a space where they can buy products at full price, maybe above the price point they want to spend, but they can embrace that price point because they know it’s value priced every day,” Yalof explained.
Yalof’s comments align with data showing consumers are spending more than their confidence levels might suggest. The Visa report, tracking payments activity starting November 1, revealed that in-store shopping accounted for 73% of spending, while online sales grew 7.8% year over year.
However, consumer sentiment remains subdued. The Conference Board reported Tuesday that its consumer confidence index decreased 3.8 points to 89.1, down from an upwardly revised 92.9 in November. This brings the index close to the 85.7 level seen in April, when the administration implemented broad import duties on U.S. trading partners.
The latest survey released last week, found that 41% of Americans planned to spend less this holiday season, a 6-point increase from the previous year, as higher prices continue to influence shopping habits.
Looking ahead to 2026, Yalof indicated that retailers are optimistic about continued demand. “Retailers want stores. They love bricks and mortar,” he said, adding that brands are increasingly seeking to control their own physical retail presence as department stores consolidate.
