What: Thrift and off-price retailers saw significant traffic and sales growth during the 2025 holiday season, while traditional apparel and department stores struggled to keep pace.

Why it is important: The shift toward secondhand and discount shopping reflects broader economic pressures and a generational move toward more intentional, research-driven spending.

During the 2025 holiday season, American consumers increasingly favored thrift and off-price retailers, resulting in notable traffic and sales gains for these formats, while traditional apparel and department stores experienced declines. Economic uncertainty and the impact of tariffs contributed to heightened price sensitivity, prompting shoppers to seek value and unique finds in secondhand and discount channels. This migration was not limited to lower-income groups; higher-income and younger consumers also contributed to the surge in thrift store visits, signalling a broader shift in retail preferences. The trend toward more disciplined, research-driven shopping was evident in the decline in return rates, as consumers stuck more closely to shopping lists and made more deliberate purchasing decisions. Online sales also rose, but the most pronounced changes were seen in physical retail, where the “treasure hunt” experience and sustainability considerations drove engagement. As a result, the holiday season underscored the need for traditional retailers to adapt to evolving consumer priorities centred on value, intentionality, and discovery.

IADS Notes: The 2025 holiday season’s retail landscape is defined by a marked shift toward value-driven formats and discovery-based shopping, as detailed by Placer.ai in December 2025, which observed discount, off-price, and thrift retailers outperforming traditional categories amid heightened price sensitivity. Inside Retail’s December 2025 analysis confirms that, despite economic headwinds, overall holiday sales rose, with value-oriented retailers and warehouse clubs attracting both budget-conscious and higher-income shoppers, while department stores struggled to maintain traffic. PwC’s September 2025 report highlights a 5% decline in overall holiday spending, driven by Gen Z’s cutbacks and a generational divide, with secondhand gifting and flexible shopping channels gaining traction. Forbes, in December 2025, underscores the rise of the resale market as a key growth engine, fueled by consumer demand for thrift, sustainability, and innovation, prompting retailers to integrate circular economy strategies. Meanwhile, the Financial Times in December 2025 notes that more disciplined, research-driven shopping and a decline in return rates are reshaping both holiday season dynamics and the economics of e-commerce, reflecting a more intentional and value-focused consumer mindset.

More thrifting and fewer returns, the early trends that defined shopping this holiday