Key Highlights - Preliminary data from Visa shows U.S. holiday retail sales rose 4.2% year-over-year, unadjusted for inflation. - E-commerce sales surged 7.8%, though physical stores still accounted for nearly three-quarters of total retail spending. - Electronics sales jumped 5.8%, attributed by Visa to consumer demand for high-performance devices in the AI era.

On Saturday, December 20, 2025, shoppers flocked to the Glendale Galleria in California during the final weekend of Christmas gift-buying.

Visa’s preliminary data, released Tuesday, revealed resilient consumer spending this holiday season, driving a 4.2% increase in U.S. retail sales compared to the same period last year. The report from Visa’s Consulting & Analytics division noted that despite ongoing economic headwinds, consumer spending remained robust, particularly in technology and personal goods.

The statistics, based on partial transaction data from Visa’s U.S. payment network, tracked spending over seven weeks starting November 1. The analysis focused on core retail categories, excluding automotive, gasoline, and dining expenditures, with all figures unadjusted for inflation.

Physical stores dominated holiday spending, accounting for 73% of total U.S. retail payments, while online sales made up the remaining 27%. However, e-commerce was the primary growth driver, with online sales rising 7.8% year-over-year, reflecting sustained demand for shopping convenience and early holiday promotions.

Michael Brown, Visa’s U.S. Chief Economist, told CNBC, "One notable trend is that despite lower consumer confidence compared to last year, compounded by economic challenges and inflation concerns, U.S. spending remains strong."

Brown highlighted a shift in 2025 holiday shopping behavior, with AI increasingly influencing product selection and price comparisons. "Consumers are widely using AI tools to compare prices and curate gift lists," he said. "This is the first holiday season where we’ve observed this trend, with surveys indicating about half of shoppers rely on AI for either price checks or product recommendations."

**Category Breakdown** Spending patterns underscored a pivot toward personal goods and convenience, while home improvement lagged. - Electronics led with a 5.8% sales increase, fueled by upgrades to AI-ready devices. - Apparel and accessories rose 5.3%, while general merchandise stores (offering one-stop shopping) grew 3.7%. - Conversely, home improvement spending fell 1%, signaling a preference for gifts and tech over renovations. - Furniture and home furnishings saw minimal growth at 0.8%.

**Inflation-Adjusted Reality** While the headline growth is positive for retailers, unadjusted figures suggest real sales growth was likely more modest after accounting for inflation. Brown estimated inflation-adjusted growth at approximately 2.2%.

"Given this year’s economic uncertainties, this performance is commendable," Brown noted. "Consumers are cautious but strategic in their spending."

Visa’s data also revealed a disconnect between sentiment and behavior. A recent CNBC survey found 41% of Americans planned to cut holiday spending—up 6 percentage points from 2024—with high prices influencing budgets and shopping channels. Persistent inflation and tariff-driven import costs continue to pressure shoppers at checkout.