Gen Z and millennial shoppers will account for 50% of holiday spending for the first time, according to Deloitte's 2026 holiday forecast. The average U.S. household is expected to spend $1,654 this season, a 4% increase over last year.

The finding comes from Deloitte's survey of 4,000 U.S. adults, conducted Aug. 26 to Sept. 10. The consulting firm projects total retail sales from November 2026 through January 2027 to rise between 4.0% and 4.8%, reaching between $1.70 trillion and $1.71 trillion. Online sales should grow between 7.5% and 8.4% year over year.

Both younger generations plan to increase holiday spending by double digits. Brian McCarthy, Retail Strategy Leader at Deloitte, said both groups report their household financial situation is better this year than last.

The generational shift is sharp. Gen Z's share of expected holiday spend rises to 16%, up from 10% in 2025. Millennials reach 34%, up from 31%. Gen X falls to 28% from 31%, and baby boomers drop to 20% from 26%.

What does this change for retailers?

McCarthy said retailers should cater to younger shoppers' interests in personalization and convenience by providing wish-list tools, fast delivery and gifts that can be personalized.

The $1,654 household spend splits into $988 for retail goods, a 10% year-over-year increase, and $666 for holiday activities, a 4% decrease. Shoppers cite higher prices than last year as a main reason for spending more on goods.

Tech-tool users spend the most

Generative AI is a primary shopping tool for younger consumers. Overall, 39% of consumers use generative AI for budgeting, gift inspiration, deal discovery, personalized recommendations, price comparison or finding alternatives. That rises to 49% of Gen Z and 50% of millennials.

Deloitte finds a direct link between tool use and spend:

• 30% of shoppers plan to use generative AI, search and social media, and will spend $2,893 on average.
• 35% plan to use two tools and will spend $1,436.
• 27% plan to use one tool and will spend $1,222.
• 8% plan to use no tools and will spend $1,147.

Early shopping hits a six-year high

More than 1 in 5 shoppers (22%) plan to start shopping earlier than last year. And 28% say their budget is "likely to be exhausted" by the end of October — the highest share in six years of Deloitte's survey.

Promotions drive the early start. Some 42% of shoppers plan to buy during October sales, nearly matching the 44% who plan to buy on Cyber Monday. November remains the largest expected shopping period.

Deloitte labels about 38% of consumers "holiday value seekers." These shoppers:

• Start early — 65% will have begun shopping by late October, versus 48% on average — and stay engaged all season.
• Redeem loyalty points and buy private labels.
• Shop at off-price retailers and dollar stores.
• Visit retailers on social media and use generative AI.

Value seekers plan to spend 12% more than the average shopper, because consumers define value as more than price. "Additional factors driving value can include product quality and trust in the brand," McCarthy said in an email.

Other findings from the survey

• Half of shoppers plan to give experiences as gifts, up from 47% in 2025 and 39% in 2024.
• Clothes and accessories is the largest category at 67% of shoppers, followed by toys and hobbies at 61%.
• Shoppers will spend more on gifts and seasonal items, and less on travel and events.
• 33% plan to buy a gift for themselves, led by Gen Z (49%) and millennials (42%).
• Shoppers plan to buy an average of eight gifts, unchanged from last year.

For marketers, the season's playbook is set: reach a younger, AI-assisted, early-shopping majority before October ends, or lose them to competitors who do.