Visa expects holiday sales to rise 4.5%, the biggest jump since 2021

Visa expects U.S. holiday retail sales to rise 4.5% this season, the biggest jump since 2021. The forecast comes from Visa Business and Economic Insights, the company's research arm. People are ready to spend on gifts, but many are being careful about where the money goes.

What the forecast says

Visa points to rising household income and wealth as the reason for the lift, even as higher prices cut into extra spending. Visa economist Michael Brown put it this way: "Consumers are heading into the holidays with the capacity and willingness to spend, even if they're being thoughtful about where those dollars go."

The numbers behind it

• Shoppers plan to spend an average of $777 on gifts, up 5.6% from 2025.
• About one-third of people earning under $100,000 plan to switch to cheaper brands or stores.
• More than 27% of shoppers are putting money toward physical gifts instead of experiences like trips.

Gifts over getaways

Higher travel costs are pushing some people to shift their budgets. Visa says money that might have gone to holiday trips could instead go toward physical gifts and other merchandise. That could help local stores. Higher-income households, especially those earning over $200,000, are still spending on travel, and airfare bookings have risen sharply among them.

Who it affects

Shoppers with tighter budgets are becoming more selective, which creates a split. Higher earners are spending freely in some areas, while lower earners hunt for value. Visa's report also notes that budgets could tighten later in the season. Small retailers face a mixed crowd, and prices will matter.

What to do

For shop owners, the advice in the coverage is to lead with value. Gift bundles and promotions can help customers stretch their money. Highlighting higher-value products, and staying aware of customers' money worries, may also help. Community events can bring people through the door and build goodwill.