How Inflation, AI, and Sustainability Are Reshaping American Holiday Celebrations in 2025

For many families, the holidays have always been a time of comfort, celebration, and tradition — but 2025 looks different. With grocery prices up nearly 30% since 2020 and inflation continuing to squeeze household budgets, Americans are rethinking how they gather, give, and celebrate.

To understand how people are navigating this holiday season, we surveyed 1,000 U.S. adults across income levels, ages, and family types. We asked how inflation is influencing spending, which areas of the budget are being cut, and how AI is showing up in holiday planning.

Key Takeaways

• About 1 in 8 Americans aren’t celebrating the holidays this year — primarily due to the economy.
• 3 in 4 cite financial strain, with over half (54%) pointing to inflation and nearly 1 in 4 saying they need to save for essentials.
• 43% are spending less this year; 35% of families with children expect to spend less than last season.
• 72% of parents say Santa is “taking the fall” for cutbacks — telling kids he’s helping others in need (22%) or delivering fewer gifts (15%).
• 1 in 4 Americans are changing their holiday meals to cut costs.
• 70% of Americans plan to use AI tools to help plan or shop for the holidays.
• 75% will reuse wrapping paper or gift packaging to save money and reduce waste.
• 71% of Americans feel pressured to spend more than they can afford on the holidays.

Americans Are Celebrating on a Budget

This year, Americans are stretching every dollar to make the holidays happen. Nearly three-quarters (71%) feel pressured to spend more than they can afford. But spending levels vary significantly:

• 61% of families with children plan to spend $500 or more this holiday season, compared to 33% of those without children.
• Nearly half of non-parents plan to spend under $500; 26% plan under $250.
• Of households earning under $25K, 42% will spend under $250. Of households earning $100K or more, 43% will spend over $1,000.

72% of parents are letting Santa take the blame for budget constraints — telling kids he’s helping others in need or delivering fewer or smaller gifts this year.

Inflation Has a Seat at the Table

Food prices have risen faster than overall inflation. The USDA predicts food prices will continue to rise in 2026 — possibly by as much as 2.7%. Over two-thirds (68%) of Americans say rising food prices have changed how they plan holiday meals:

• 1 in 4 Americans are buying generic brands to save money.
• 24% are skipping dining out.
• 23% are making cheaper dishes this year.

Despite the cuts, people are refusing to skip the classics. 67% plan to have turkey, with stuffing or dressing (64%), cornbread or rolls (57%), ham (54%), and sweet potatoes or yams (53%) also widely planned. Desserts hold firm: pumpkin pie (57%), apple pie (43%), and chocolate chip cookies (35%) will appear on tables across the country.

AI Is Santa’s Newest Helper

70% of Americans plan to use AI tools to help streamline their holiday plans this year — making AI one of the most widely adopted new holiday tools in recent memory.

How different generations are using AI this season:

• Millennials: 76% plan to use AI
• Gen Z: 69%
• Baby Boomers: 65%
• Gen X: 63%

What they’re using it for:

• Finding deals: 68%
• Generating gift ideas: 65%
• Staying on budget: 47%
• Finding unique gifts for hard-to-shop-for people: 39%
• Writing gift messages or holiday cards: 37%

Small Luxuries Replace Big Splurges

Rising costs aren’t stopping people from treating themselves — they’re just choosing smaller comforts. The most popular “small splurges” this season:

• Holiday-themed snacks: 41%
• Candles or home fragrances: 40%
• Cozy clothing: 39%
• Seasonal decor: 38%

51% of pet owners plan to buy their animal a Christmas present, usually in the form of treats or snacks. On the other side, the items most often returned, regifted, or never used include clothing (33%), scented candles (24%), bath gift sets (23%), and novelty mugs (19%).

How Americans Are Packaging Their Presents

Presentation matters — 40% of Americans believe making gifts look special is a vital part of the holiday experience. But with budgets tightening, 75% of consumers plan to reuse wrapping paper or gift bags this year. This isn’t purely a financial decision: high-income households also chose to reuse packaging for sustainability reasons.

Packaging and sustainability are influencing purchasing decisions too:

• 30% of respondents said eco-friendly packaging made the gift feel more thoughtful.
• 26% cited feeling less environmental guilt when offering gifts in sustainable packaging.
• 57% of Americans say holiday-themed packaging makes them more likely to buy a product.
• Nearly 1 in 5 (19%) bought an item entirely for the holiday packaging alone.

The Bottom Line

Going through the holiday season on a budget has a way of clarifying what really matters. Across the country, people are leaning into low-waste habits, more intentional gifting, and small comforts that spark joy without the stress of overspending. The data shows that sustainability and value are not just nice-to-haves — they are active purchase drivers during the most important shopping season of the year.

For brands selling consumer products, the packaging takeaway is direct: eco-friendly, reusable, and holiday-themed packaging increases purchase likelihood and reinforces brand thoughtfulness at a time when customers are paying close attention to every dollar they spend.

Methodology

We surveyed 1,000 U.S. adults about their holiday spending, AI use, packaging habits, and meal planning. Respondents were segmented by age, gender, income, and household type to understand how inflation, technology, and sustainability are reshaping celebrations.