American consumers are spending more this holiday season, as retailers lure them with bargains. The search for bigger discounts isn’t just seasonal, though.
A record 203 million consumers shopped during the Thanksgiving weekend, according to the National Retail Federation. More than $44 billion was spent online from Thanksgiving through Cyber Monday, up about 8 percent from last year, data from Adobe Analytics showed.
But shoppers struggling with inflation and economic uncertainty have sought out sales and turned to coupon finders and cash-back services throughout the year. Feeling stretched by the ripple effects of tariffs and high interest rates, people are stacking discounts and using “buy now, pay later” at checkout, too.
“Consumers have faced several years of rising costs, and what we’re seeing now is resilience turning into strategy,” said Magali Darling, the chief commercial officer at RetailMeNot, a company that offers discount coupons and cash-back options on some purchases. “It’s a long-term shift in how consumers approach spending, with a stronger focus on making every dollar work harder.”
At RetailMeNot, account registrations this year through November jumped 22 percent from the same period in 2024. Buy-now-pay-later use has also spiked — just on Monday, the payment method drove more than $1 billion in online spending, according to Adobe Analytics.
The National Retail Federation predicted that retail sales in November and December would exceed $1 trillion for the first time. But that total masks a growing divide in how Americans buy: High-income shoppers are increasing spending at more expensive stores, while middle-income households are turning to value brands.
“Everything’s more expensive,” Jill Polisson, 67, said as she made her way into a Kohl’s in Branford, Conn., on Black Friday. She said she usually shopped at the store when there were sales and took advantage of Kohl’s Cash, a rewards system. She also frequents T.J. Maxx and Marshalls for low-priced items.
“I’m buying less this year, but I am looking for more sales,” Ms. Polisson said. “I plan to buy less for family and friends.”
Visits to other value retailers like Burlington Stores, Ross Dress for Less and Walmart have increased this year, according to data from Placer.ai, a company that analyzes foot traffic at stores.
For lower-income households, “there’s only so much trading down that they can do, but using different discounts or sales, that’s shifting the timing of some spending,” said Ryan Sweet, the chief U.S. economist at Oxford Economics.
“But the bulk of consumption is done by everyone in between, and that’s an enormous number of people,” he added. “That’s where you’re seeing the most trading down occurring.”
In recent earnings calls, several retailers noted that lower prices were driving business and enticing new customers. Walmart said increased earnings had stemmed in part from the shift toward value items. T.J. Maxx said its lower prices were distinguishing it from competitors.
At the same time, retailers selling discretionary or luxury items, such as Best Buy and Williams Sonoma, have increased revenue in recent quarters, suggesting that some consumers will still splurge on big-ticket gifts. Macy’s on Wednesday reported better-than-expected sales across its inventory, from discounted items to luxury goods.
Jean Gargano, 65, said outside a shopping center in Branford that she was focusing on smaller purchases for her grandchildren, or one larger gift: “If one gets a bigger gift, the other ones get two smaller ones, but it equals out in price.”
Even with a slew of discounts, some consumers are still going beyond their means to afford the holidays. In an August survey by Rakuten and Harris Poll, 24 percent of respondents with an annual household income below $50,000 expected to add credit card debt to afford seasonal shopping.
Klarna, a company that splits payments up over time at variable interest rates, saw a 32 percent rise in users in the three months through September compared with the same period in 2024. In July, it released a debit card in the United States that allows users to buy an item at full price or pay over time. As of November, the card had more than four million sign-ups, the company said.
Through November, buy-now-pay-later spending this year had reached nearly $80 billion, up 8 percent from 2024, according to Adobe Analytics.
Andrew McManus, 26, said he had relied more on Klarna and After Pay — another buy-now-pay-later provider — as prices had risen. Mr. McManus, of Yonkers, N.Y., said he would prefer to pay full price but had to change his shopping habits throughout the year and heading into holiday spending.
“Prices have just gotten so out of hand within the last year,” he said.
Retailers have also been putting more products, including food and toys, on sale this holiday season. Online sellers slashed prices not just for Black Friday but also in the weeks leading up to it.
Outside a shopping center on Black Friday, Karen Pirreca, 63, said she had “scaled down who we normally would buy for.”
Facing higher prices throughout the year, she began to use Fetch, a rewards app. She said she planned to pare back her holiday purchases to buy gifts only for the children in her family.
“Every little bit helps,” Ms. Pirreca said.
Emmett Lindner is a business reporter for The Times.
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