Shoppers in California plan to splurge this coming holiday season, but not because they are confident about the future. They are worried about inflation and figure it’s better to buy now than pay more later.
At least that’s the takeaway from a new report from accounting firm KPMG that shows that consumers on the West Coast are more concerned about price rise and tariffs than those in any other region in the country.
Nationally, shoppers intend to boost their holiday spending by 4.6% this year compared with last year, spending an average of $847 on shopping, according to the report.
“When you think about why consumers are planning on spending more, it’s not that they have more wallet to spare, but it’s actually an expectation that prices are increasing,” Duleep Rodrigo, KPMG U.S. consumer and retail leader, said in an interview. “Eighty percent also of consumers are really being very conscious about inflation, and inflation that is impacted as a result of tariffs.”
Of the six different regions KPMG surveys, the Pacific region — which includes California, Oregon, Washington, Hawaii and Alaska — showed the highest concern for rising prices due to tariffs, with 72% citing inflation as a top concern.
Nationally, 8 in 10 consumers believe tariffs will result in price increases. The least concerned were consumers in the Northeast, where only 6% said price increases would result in cutting back on holiday spending.
“The consumer is spending like a poker player with a small chip stack,” Rodrigo said in the report. “They know they can’t play every hand but are willing to go ‘all in’ on a promising hand with a high emotional payoff. There’s also a psychological element where the consumer is managing a complex set of uncertainties.”
KPMG found that consumer spending on essentials such as groceries, automotive expenses and personal care have increased in 2025, though much less than last year. In discretionary categories such as toys, furniture and hobby supplies, people expect to spend less.
As budgets get tight, more people plan on spending on themselves this holiday season, with many purchasing big ticket holiday travel costing more than $1,000.
The top gifts people want to receive this holiday season? Cold hard cash — followed by gift cards and apparel — indicating that more people want flexibility to spend on things they like, according to KPMG.
Consumer price inflation for Los Angeles increased 3.3% in August, compared with the same time last year. National consumer inflation stood at 2.9% for the same period, according to the U.S. Bureau of Labor Statistics.
From toys to apparel, retailers have experienced varying levels of impact due to President Trump’s sweeping tariffs on much of the world this year.
Many retailers have been absorbing the costs of tariffs imposed by the Trump administration but cannot hold off indefinitely.
Rodrigo said price increases on goods have already started happening, with retailers being more strategic.
“For now, consumers that are in the top 20% are probably driving 80% of the economic activity that is sustaining and maintaining the current state of the economy,” Rodrigo said. “But there is a larger population that is really hurting, and that is really concerned with their dollars right now.”
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