U.S. Shoppers Tighten Belts as High Prices Push a Shift to Practical Purchases

As the year-end shopping season unfolds, American consumers are zeroing in on essentials—from home appliances to

basic household goods—while pulling back on discretionary spending. Although headline inflation has cooled compared with earlier this year, many households say the economic squeeze still feels intense, reshaping how and where they spend.

Shoppers are spending more time hunting for discounts, comparing rock-bottom prices, and scaling back both the size and scope of holiday gift lists. For many, the focus has shifted from splurging to simply getting the most value for money.

The data back up that shift. According to Adobe Analytics, online sales of refrigerators and freezers on Cyber Monday surged 1,700% compared with October daily averages. Other categories showing explosive growth included vacuum cleaners (up 1,300%), small kitchen appliances (1,250%), cookware (950%), and power tools (900%)—items that consumers increasingly view as necessities rather than luxuries.

“Many of the top-selling products are essentially essentials,” said Vivek Pandya, director of Adobe Digital Insights. “Consumers are shopping very strategically, clearly mindful of the broader economic environment.”

Spending patterns are also diverging by income group. Low- and middle-income households are cutting back outright, while higher-income consumers are engaging in what analysts describe as “trade-down” behavior—bypassing luxury boutiques in favor of more affordable retail channels.

An analysis by Consumer Edge of more than 100 million credit card transactions found that department store sales this holiday season are down about 10% from a year earlier. Sales at luxury apparel brands have also slipped, declining by roughly 5%.

Discount retailers, by contrast, are seeing a surge in foot traffic. At Dollar Tree, about 60% of new customers in the third quarter had annual incomes above $100,000, an unusually high share for a dollar-store chain. Dollar General reported a 2.5% increase in same-store sales during the same period. “The proportion of higher-income customers is growing disproportionately,” said Dollar General CEO Todd Vasos.

Retail experts say Americans are increasingly relying on discount chains and warehouse clubs, nudging total spending slightly higher while buying fewer items overall. The National Retail Federation forecasts holiday retail sales to rise about 4% this year—below last year’s 4.3% increase and far slower than the 13% surge seen in 2021.

“U.S. consumers are clearly adopting a more practical mindset,” said Mary Whitfield, senior vice president at research firm Kantar. “That tendency appears to have intensified, especially in the wake of the government shutdown, reinforcing a cautious, value-driven approach to spending.”