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U.S. consumers, particularly Gen Z, are likely to spend significantly less on the holidays this year, according to a new PricewaterhouseCoopers survey. For PwC’s 2025 Holiday Outlook, the consulting firm polled about 4,000 consumers nationwide between June and July, and found shoppers expect to spend 5.3% less than in 2024, or about $1,552 per person. It’s the first notable drop since 2020when average spending fell 7.6%, to $1,187. That’s not all. Some 84% of Americans expect to cut back over the next six months, particularly when it comes to eating out (52%), clothes (36%), and big-ticket items (32%)as a result of rising prices and tariffs (especially on electronics, apparel, toys, food, and household staples)and the overall high cost of living. More than half of those surveyed said increased prices will likely affect what they decide to purchase, making value a defining theme of the 2025 holiday season. Gift spending is expected to take the biggest hit, down 11% to an average of $721, from $814 in 2024while people continue to spend on travel and entertainment, at an increase of 1%. Gen Z holiday spending expected to drop sharply PwC expects the sharpest decline in shopping to come from Gen Zers, who say they expect to reduce their holiday spending by a whopping 23%, leaving retailers to compete over fewer dollars. However, the good news for retailers is that millennials, Gen Xers, and baby boomers are expected to spend about the same as last year, possibly slightly more. What shoppers are looking for this holiday season More than a good deal, consumers are seeking value and brands they feel “get” them this holiday season. As with all forecasts, it’s worth noting this survey took place in June and July, during a period of high uncertainty over tariffs, and that purchasing behavior could always change between now and December, along with the economic climate and outlook.
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E-Commerce
Macy’s raised its expectations for the year and reported the first increase in same-store sales since 2022 after the department store chain intensified its focus on modernizing stores and improving the customer experience. Comparable-store sales are considered a good barometer of a retailer’s health and, for the last three years, they had been been a reminder that the storied department store chain had a long way to go. Macy’s reported an 0.8% increase in comparable sales. Industry analysts, who had expected a 0.5% decrease, were caught off guard by the swing and the company’s shares rocketed 19% higher Wednesday. They remain negative for the year, however. The reversal in comparable-store sales underscored how Macy’s campaign to improve customer experience and the merchandise on its shelves has enticed shoppers to buy even as Americans as a whole grow more cautious about spending as President Donald Trump’s trade war raises economic anxiety. Macys is grappling with an uncertain economic backdrop and higher costs, particularly because of the tariffs, and said Wednesday that it even though customers have proven resilient, they remain choosy about what they are buying, and executives are usure how tariffs will affect spending for the remainder of the year. We’re celebrating the second quarter but were being prudent in our guidance for the third quarter and the remainder of the year because we want to see how the tariff environment plays out in totality, Macy’s CEO Tony Spring told investors during a conference call on Wednesday. The company said in May that it was diversifying the origin of its imports and pulling items when the math doesnt work. Spring told analysts that the company is trying to take a surgical approach” when it comes to price increases. The department store has already raised some prices, though Spring did not specify where. He noted in some cases, it has had to cut back on orders on items where it raised prices. We’ve tried to be really thoughtful about what categories can bear the cost and the increases and where weve had to negotiate a little bit harder, he said. Spring said the approach by Macy’s, which also owns upscale Bloomingdales and the cosmetic chain Bluemercury, of running different chains that cater to different types of shoppers, has been an advantage. The company is not as reliant on one product category or one consumer sector, he said. Roughly 50% of customers at the Macy’s has a household income of over $100,000, and for Bloomingdale’s and Bluemercury, there’s a larger percentage of shoppers with household incomes over $150,000, Spring told The Associated Press on Wednesday. But he said while the lower income segment spent less, the difference wasn’t sizeable. And tariffs may affect prices broadly. About 20% of the department store’s products came from China at the end of its last fiscal year, according to Macy’s. Private brands sourced approximately 27% from China, down from 32% last year. Macy’s reported net income of $87 million, or 31 cents per share, for the quarter ended Aug. 2. That compares with $150 million, or 53 cents per share, in the year-ago period. Adjusted earnings were 41 cents a share, well above the 19 cents per share estimated by FactSet. Sales fell to $4.99 billion from $5.09 billion in the year-ago period. Analysts expected $4.7 billion, according to FactSet. Including its licensed businesses, comparable sales rose 1.9% for all of its stores including its licensed businesses. The retailer has closed unprofitable stores while investing heavily in modernizing Macy’s locations, and that appears to be working. Macys first 125 revamped stores achieved comparable sales growth of 1.4%, surpassing the 1.2% gain for all Macy’s locations. The company has been adding more customer service in the fitting areas as well as the shoe department. It’s also been trying to differentiate its luxury business from its rivals by adding exclusive merchandise For the year, Macy’s raised its earnings per share forecast to a range of $1.70 to $2.05, up from $1.60 to $2. Macy’s also expects sales between $21.15 billion and $21.45 billion in 2025, up from $21 billion to $21.4 billion. Wall Street has been projection per-share earnings of $1.79 on sales of $21.18 billion for the year, according to FactSet. By Anne D’Innocenzio, AP retail writer
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E-Commerce
C-SPAN said Wednesday that it had reached a deal to have its three channels air on YouTube TV and Hulu’s live television feed, ending a dispute that had led to a revenue squeeze for the public affairs network in the cord-cutting era. The network said the streaming services would pay the same fee as cable and satellite companies, roughly 87 cents a year per subscriber, and that C-SPAN would continue its no-advertising policy on television. Congress involved itself in the issue, passing a resolution this spring calling on the services’ parent companies Alphabet for YouTube and Disney for Hulu to add C-SPAN to their programming mix. Because congressional sessions and hearings represent a big portion of C-SPAN’s programming, the politicians faced diminished airtime without a deal. At its peak a decade ago, C-SPAN was seen in some 100 million homes with television. The number of homes paying for TV has since dropped to some 70 million, with roughly 20 million of those consumers now getting television through services like YouTube and Hulu, and they weren’t showing C-SPAN. C-SPAN said its revenues had dropped from nearly $64 million in 2019 to $45.4 million in 2023. We are proud that this agreement will give millions more Americans access to our unfiltered coverage of the nation’s political process, said Sam Feist, C-SPAN’s CEO. David Bauder, AP media writer
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E-Commerce
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