The 2025 holiday season is shaping up to be an uneven one, with two distinct groups vying for dominance: those who can afford to spend and those who are struggling to make ends meet. While the affluent crowd is still splurging on luxuries, like $49 chicken parmesan and $165 porterhouse steaks in Vegas, others are cutting back due to stagnant wages and rising costs.
According to HR firm ADP, average salaries have risen between 4.5% and 6.7%, a modest bump that's barely keeping pace with inflation. Meanwhile, the stock market has seen a slight uptick of over 13% since the start of the year, but this isn't translating to increased consumer spending. In fact, rises in hourly wages have been tracking below 3% for over a year, leaving blue-collar workers with limited room for wage growth.
Credit rating analyst Van Hesser notes that the top 10% of earners account for 50% of spending, but the rest are barely scraping by. With credit card debt piling up and millions losing their jobs due to corporate mismanagement, restructurings, and the impact of AI, the next few years will be uncertain at best.
Retail analysts are forecasting a modest growth in holiday sales, with S&P Global Ratings predicting a 4% increase from last year. However, Deloitte is projecting a more subdued 2.9% to 3.4% growth, well below the 10-year average of 5.2%. The reasons for this slowdown are all too familiar: tariffs, inflation, and uncertainty.
As small businesses prepare for the holiday season, they'll be eager to know how their customers will respond. While those in affluent areas like New York, Boston, DC, and San Francisco may fare well, others may struggle to make ends meet. With holiday sales accounting for up to half of annual revenue, it's a critical period for small businesses to navigate.
The divide between the haves and have-nots is stark, with the wealthy continuing to spend while the less fortunate pull back. As one expert puts it, it's a "tale of two economies" – one where wealthier consumers are driving growth, but others are struggling to stay afloat. Small businesses will need to adapt to this uneven landscape if they hope to survive the holiday season and thrive in the years ahead.
According to HR firm ADP, average salaries have risen between 4.5% and 6.7%, a modest bump that's barely keeping pace with inflation. Meanwhile, the stock market has seen a slight uptick of over 13% since the start of the year, but this isn't translating to increased consumer spending. In fact, rises in hourly wages have been tracking below 3% for over a year, leaving blue-collar workers with limited room for wage growth.
Credit rating analyst Van Hesser notes that the top 10% of earners account for 50% of spending, but the rest are barely scraping by. With credit card debt piling up and millions losing their jobs due to corporate mismanagement, restructurings, and the impact of AI, the next few years will be uncertain at best.
Retail analysts are forecasting a modest growth in holiday sales, with S&P Global Ratings predicting a 4% increase from last year. However, Deloitte is projecting a more subdued 2.9% to 3.4% growth, well below the 10-year average of 5.2%. The reasons for this slowdown are all too familiar: tariffs, inflation, and uncertainty.
As small businesses prepare for the holiday season, they'll be eager to know how their customers will respond. While those in affluent areas like New York, Boston, DC, and San Francisco may fare well, others may struggle to make ends meet. With holiday sales accounting for up to half of annual revenue, it's a critical period for small businesses to navigate.
The divide between the haves and have-nots is stark, with the wealthy continuing to spend while the less fortunate pull back. As one expert puts it, it's a "tale of two economies" – one where wealthier consumers are driving growth, but others are struggling to stay afloat. Small businesses will need to adapt to this uneven landscape if they hope to survive the holiday season and thrive in the years ahead.
I've seen friends who can afford some crazy stuff splurging while their coworkers are literally barely scraping by 
it's wild how stagnant wages and rising costs are affecting people's lives. like, a $49 chicken parmesan in vegas? 
that's just not even real for most ppl. and the whole top 10% of earners accounting for 50% of spending thing is just so uneven 
small businesses need to be super careful this season 'cause it's a tough time for those who can't afford to shop.
one where ppl can afford 2 splurge & another where ppl are just tryna make ends meet 
but the cost of livin is still way up 
it's like they r in a whole different world 
small biz owners gotta be careful too 
they need 2 know how their customers will react 
... it's like, yeah, some folks have that extra cash to splurge on fancy food and whatnot, but others are barely holding on 
. And now, even credit card interest is a thing... gotta wonder how small businesses will do during the holiday season 
I mean, 49 bucks for chicken parmesan is just insane! 
And with credit card debt piling up, it's getting harder for people to afford even basic things like groceries 
It's not all doom and gloom though... some small businesses might be able to weather the storm if they're smart about their pricing and marketing 
u got ur fancy folks splurggin away on luxuries but meanwhile ppl who dont get paid enough r strugglemin to make ends meet 
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u hear? 
. And with credit card debt piling up... 
. Rich people can still splurge on fancy food and drinks, but for everyone else, it's a constant struggle to make ends meet 
.
. They need to figure out how to cater to customers who are still feeling the pinch, while also trying not to get left behind by those wealthy folks who can still afford to shop 'til they drop 
its crazy that avg salaries are only up by 5% or so when inflation is still high 
. I don't think it's all doom and gloom though - some small businesses might do alright if they can find ways to cut costs without sacrificing quality 
.
. It's so unfair 
but working class ppl can't even afford basic needs 
