Inflation? Tariffs? Trade wars? After a contentious election, Bay Area shoppers may still feel nervous about the economy’s direction, but many appear ready to spend this holiday season — albeit with a keen eye on prices.
Heading into the Thanksgiving weekend, gift-hunters were already flocking to shopping malls and retail stores across the region in search of early Black Friday deals on everything from athleisure to kitchen accessories.
“I feel like shopping around this season is what makes home, home,” said Sofia Arroyo, 21, perusing stores at San Jose’s Santana Row while back from college for Thanksgiving. “I was looking forward to coming home and being in a mall and seeing the Christmas trees and stuff. It makes you feel like the holiday spirit.”
Nationwide, holiday shoppers are expected to spend almost a trillion dollars — between $979.5 billion and $989 billion — a 3% increase from last year, according to the National Retail Federation. That would be a new record, yet a smaller bump in sales compared to recent years.
The optimistic estimate comes despite widespread anxiety over higher prices — even as inflation has returned to historical averages — and a drumbeat of headlines about how President-elect Donald Trump’s promise to impose tariffs on a range of imports could rattle global markets.
“Household finances are in good shape and an impetus for strong spending heading into the holiday season,” said Jack Kleinhenz, chief economist with the retail federation, in a statement.
The retail federation expects per-person spending on holiday gifts, food, decorations and other seasonal items this year to come to $902, up from $875 in 2023.
But with overall prices 20% higher than before the coronavirus pandemic, consumers remain cost-sensitive. According to a survey by business consultant Deloitte, almost two-thirds of holiday shoppers plan to seek out lower-priced brands, while nearly half intend to trade down to more affordable retailers.
Sarah Chester, who lost her El Cerrito home in a fire in 2022, said she’s still reeling from the financial and emotional toll of the blaze, explaining how every nail was more expensive to replace compared to pre-COVID prices.
“My soul hurts from how much we’ve had to buy from Amazon,” she said. “Prices have just gone through the roof.”
Still feeling the fog of the election two days before Thanksgiving, the only must-buy items on her holiday shopping list were for basic prep for the week: a cheese grater, bottle stoppers, a candy cane cosmo mix and colorful pack of “Teenie NeeDoh Cool Cats” stress balls for her kids, which she and her husband will undoubtedly borrow.
“We just needed tools to help us get through,” Chester said. “I think for consumers in general, it doesn’t feel safe to spend when you don’t know what the chaos machine is doing.”
Miro Copic, a marketing lecturer at San Diego State University, said retailers are being especially responsive to cost and spending concerns by offering even more deals than in previous years, and doubling down on a recent trend of starting Black Friday promotions as early as October.
With more pre-Thanksgiving sales, expanded product inventory and the rise of online shopping, the early morning stampedes of bargain-seekers — once a hallmark of Black Friday — are now mostly a thing of the past, he said.
“Black Friday, conceptually, has just evolved,” Copic said.
Online sales are now estimated to account for around a third of holiday spending this year at around $300 billion, a 9% increase from 2023, according to the retail federation.
Cyber Monday, when retailers offer the most online deals, is expected to be the second busiest shopping day over the Thanksgiving weekend. But don’t forget Small Business Saturday, when mom-and-pop stores throughout the Bay Area are hoping for a boost after another year marked by high costs and hiring challenges.
San Jose Mayor Matt Mahan encouraged shoppers to visit locally owned businesses across the city’s 12 commercial districts this Saturday.
“From Calle Willow to Japantown, and Little Saigon to Downtown, residents can support their neighbors while finding the perfect gifts this holiday season,” he said.
In West Berkeley, Sally and George Kiskaddon, owners of Builders Booksource, have weathered the ever-shifting book-selling business for more than four decades.
While customers typically window shop throughout the year – often checking prices on Amazon or opting for other, cheaper online options – Sally said they’ve seen a boost in foot traffic ahead of this year’s unusually late Thanksgiving holiday.
“Honestly, people have started getting worried when they count the number of days between Thanksgiving and Christmas Eve,” Sally said with a laugh, pointing out the shop’s hybrid decor of autumn leaves and Christmas houses. “A book is a solidly good gift to give people – they’re going to get something that they don’t have, or that would make their lives better.”
