Visa says holiday spending rose 4.2% on growth in AI, technology and apparel
U.S. consumers showed resilience this holiday season, driving retail spending up 4.2% year-over-year, according to preliminary data released Tuesday by visa.
The Visa Consulting and Analytics report shows that despite ongoing economic headwinds, shoppers continue to spend, particularly on technology and personal goods.
The findings tracked payment activity over a seven-week period starting November 1 using a subset of Visa payments network data in the U.S. and covered major retail categories, excluding automobile, gasoline and restaurant spending. The numbers are also not adjusted for inflation.
The majority of holiday spending came from in-store shopping, which accounted for 73% of total retail payment volume during the period, while online purchases accounted for the remaining 27%.
However, e-commerce was the main driver of growth, with online sales increasing 7.8% year-on-year, driven by continued demand for convenience items and early-season promotions.
“The fundamental surprise here … is that consumer spending is holding up reasonably well given weaker consumer confidence than this time last year and a number of headwinds and inflation concerns,” Michael Brown, chief U.S. economist at Visa, told CNBC.
Brown noted that the 2025 holiday season marked a significant shift in consumer behavior, citing the growing influence of artificial intelligence on the way shoppers find products and compare prices.
“We’re seeing consumers using AI extensively to compare shop and then help narrow down the perfect gift,” Brown said. “This is the first holiday shopping season in which approximately half of consumers in this survey have responded that they will use AI for one of these two tasks.”
The breakdown of spending categories highlights a shift toward personal goods and amenities and away from home renovation projects.
Electronics proved to be the best-performing category of the season, with sales up 5.8%. Visa attributed this jump to a refresh cycle driven by “high-performance devices in the age of AI.”
Apparel and accessories also posted strong numbers, rising 5.3%. Convenience stores – retailers that offer a “one-stop” experience – saw a 3.7% increase.
Conversely, the home improvement industry struggled during the holidays. Spending on building materials and gardening tools fell 1%, suggesting consumers prioritized gifts and gadgets over home maintenance as the year ended.
Furniture and furnishings remained essentially unchanged, increasing 0.8%.
While the overall figure for the retail sector is positive, the lack of inflation adjustment means that “real” volume growth is likely to be more modest, depending on the final CPI readings for the period.
Currently, Brown said, inflation-adjusted real spending growth this season is still about 2.2%.
“That’s not a bad thing given the amount of uncertainty this year,” Brown said. “The consumer is uncertain, they are cautious, but they are also smart about how they spend their money.”
Visa’s numbers also suggest a disconnect between sentiment and action this season.
According to the CNBC All-America Economic Survey released last week, 41% of Americans said they plan to spend less on the holidays this year, up 6 points from a year ago.
The CNBC survey found that the high cost of goods emerged as a major factor in determining shoppers’ spending and locations, suggesting that years of inflation and increases in imported goods prices from tariffs are being felt at the checkout.
