Middle- and low-income shoppers clearly preferred value-driven items, driving traffic toward thrift shops and off-price retailers
American shoppers showed resilience during the holiday season, boosting sales 3.9% from the previous year, according to Mastercard SpendingPulse data. Shopping peaked during Thanksgiving and Black Friday sales.
The spending provides vital momentum for the US economy, which has been combating inflation, a cooling labor market, the impact of tariffs, and rising geopolitical tensions.
It saw a healthy 4.3% growth rate in the third quarter, according to the Commerce Department.
Analysts say aggressive discounting across electronics and household goods successfully lured buyers back into stores and onto digital platforms.
Bifurcation in spending habits
Shira Petrack of Placer.ai said there is a noticeable “bifurcation” in spending habits that defined the holiday season and the whole of 2025. Middle- and low-income consumers clearly preferred value-driven items, driving traffic toward thrift shops and off-price retailers up 11.7% and 6.6%, respectively.
In contrast, luxury and department stores saw only a 1.8% gain.
The shift suggests that while spending appetite remains high, budget consciousness is at the forefront. PayPal notes that ~50% of the shoppers in October turned to buy-now-pay-later services to manage their finances.