Visa says holiday spending rose 4.2% via AI, tech and apparel growth
U.S. consumers showed resilience this holiday season, increasing retail spending 4.2% year over year, according to preliminary data released Tuesday. Visa.
The report from Visa Consulting and Analytics showed that despite ongoing economic volatility, shoppers are still spending, especially on technology and personal items.
Findings tracked payments It examines activity over a seven-week period starting Nov. 1 using a subset of U.S. Visa payment network data and covers key retail categories excluding automotive, gas and restaurant spending. The figures are not adjusted for inflation.
In-store purchases accounted for the bulk of holiday spending, accounting for 73% of total retail payment volume during the period, while online purchases made up the remaining 27%.
However, the main driver of growth was e-commerce; online sales increased 7.8% compared to last year; This reflects the ongoing demand for convenience and early-season promotions.
“The key surprise here…is that consumer spending remains quite well in light of weaker consumer confidence than this time last year and some headwinds and concerns about inflation.” michael brownVisa’s chief US economist told CNBC:
Brown stated that the 2025 holiday season marks a significant shift in consumer behavior, noting the increasing influence of artificial intelligence in helping shoppers find products and compare prices.
“We’re seeing consumers use AI heavily in comparison shopping and then helping narrow down that perfect gift,” Brown said. “This is the first holiday shopping season in which nearly half of consumers surveyed responded that they would use AI for one of these two tasks.”
The breakdown of spending categories highlights a shift away from home renovation projects towards personal items and convenience.
Electronics was the season’s best-performing category, with sales up 5.8%. Visa linked this bounce To a renewal cycle driven by “high-performance devices in the age of artificial intelligence.”
Apparel and accessories also reported strong numbers, up 5.3%. General merchandise stores, which are retailers that offer a “one-stop” experience, saw a 3.7% increase.
Conversely, the home improvement industry suffered during the holidays. Spending on building materials and garden equipment fell 1%; This suggests that consumers are prioritizing gift giving and gadgets over home maintenance as the year draws to a close.
Furniture and home furnishings remained almost flat, recording an increase of 0.8%.
While the headline figure for the retail sector is positive, the lack of inflation adjustment means “real” volume growth is likely to be more modest depending on the final outcome Consumer Price Index Readings from the period.
Currently real spending growth, adjusted for inflation, is still around 2.2% this season, Brown said.
“In light of a lot of the uncertainty this year, it’s not that bad,” Brown said. “The consumer is fickle, cautious, but also smart about how he spends his money.”
Visa’s numbers also point to a disconnect between emotion and action this season.
According to the CNBC All-America Economic Survey released last week, 41 percent of Americans said they plan to spend less on vacation this year; This means an increase of 6 points compared to the previous year.
The CNBC survey found that the high cost of goods has emerged as a major factor in determining how much shoppers spend and where they spend it; This shows that years of inflation and the increase in prices of imported goods due to customs duties are felt at the cash register.
