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Competitoor continues to be recognized as a trusted source for retail and pricing intelligence. In a recent article, Vogue Business - one of the most influential global publications in fashion and luxury - turned to Competitoor’s data to analyze how U.S. consumers are approaching the 2025 holiday season amid falling sentiment and rising prices.
The holiday period is approaching at a moment when U.S. shoppers are feeling notably cautious. The University of Michigan’s latest consumer sentiment index fell to 50.3 out of 100, a 6.2% decline from October and a steep 29.9% drop year over year. These levels are hovering close to the lowest ever recorded.
At the same time, apparel and footwear prices remain higher than last year, making this year’s holiday shopping environment particularly sensitive.
According to a recent BCG report, fashion, beauty, and electronics remain the top categories where shoppers expect to spend.
Despite this, growth in the luxury sector has been driven by a narrow group of high-net-worth consumers who are insulated from economic pressure, while the average shopper still feels the impact of persistent inflation.
Neil Saunders, managing director and retail analyst at GlobalData, notes that Americans remain heavily concerned about their financial futures. “People are still dealing with high prices and becoming more thoughtful about what they buy,” he explains.
Yet the outlook is not entirely gloomy. BCG’s analysis indicates that although shoppers worry about tariffs and potential future price increases, the anxiety is somewhat softer than last year. After a slow autumn, there may even be pent-up demand heading into the holidays.
BCG’s Jeff Lindquist describes current sentiment as “cautious but far from pessimistic.” Shoppers are planning earlier, researching more actively, and comparing prices closely. They are not eliminating discretionary spending, they are simply being more selective.
Brands, he says, will need to market smarter: “Consumers are willing to spend, but their budgets are tight.”
Vogue Business highlighted Competitoor’s latest pricing intelligence, which confirms ongoing price increases across fashion and accessories. For the year ending 30 October:
Competitoor CEO Maurizio Catellani attributes these rises largely to tariff-driven increases in operating and import costs. As a result, he expects shoppers to be more careful in choosing where and how they spend.
Experts suggest that brands should consider delaying significant price increases until after the holidays to avoid alienating customers during the most commercially important quarter of the year.
Saunders notes that although consumers may accept moderate increases, brands risk being perceived as overpriced if they push too far. Since high-end luxury prices already surged in past seasons, accessible luxury has slightly more room to adjust — as consumers often compare price levels between tiers.
One of the most significant challenges is that consumers no longer automatically equate luxury with quality. Data from Belardi Wong shows:
Demand is stable, but shoppers need more convincing before making a purchase.
Catellani explains that this creates an opening for accessible luxury brands: “Consumers are gravitating toward this price tier, especially when the value proposition is anchored in quality.” With consumers forced to prioritize essentials like groceries, brands that avoid steep price hikes are better positioned to capture share.
Lindquist adds that shoppers are now more informed and selective than ever — leaving very little room for prestige beauty and accessible luxury to raise prices without pushback.
Ultimately, strong storytelling will be essential. Brands that highlight craftsmanship, longevity, or ingredient quality - rather than relying purely on promotions - will be the ones that maintain trust and loyalty.
Among all categories, beauty appears better positioned for the season. Saunders notes that many beauty products are seen as essential, problem-solving, or as small indulgences. As consumers look for “affordable treats,” beauty - particularly entry-prestige products - is expected to outperform.
Top gifting categories include:
Because beauty spans a lower price range than most fashion categories, shoppers find it easier to incorporate into holiday buying. As Elf Beauty CFO Mandy Fields explained, consumers frequently add low-ticket beauty items to their holiday shopping baskets.
Lindquist reiterates: “Beauty looks stronger this season, while fashion will require sharper value messaging and disciplined promotions.”
When it comes to fashion gifts, GlobalData expects handbags and jewelry to be strong performers. Catellani agrees and predicts that denim will also see healthy demand.
Accessories are also positioned to benefit from social media, as over 55% of shoppers now use at least one platform - such as Instagram, TikTok, or YouTube - for product discovery, a slight increase from last year.
To succeed, brands will need to curate tightly edited assortments.
For fashion, this means strong hero items and focused gifting capsules.
For beauty, this means compelling fragrance sets, limited editions, and entry-prestige gift formats that feel special yet accessible.
As Lindquist puts it, “The winners will make consumers feel both smart and inspired when they spend.”
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