Gen Z shoppers aren't spending like retailers need them to

More than other generations, 20-somethings are tightening their holiday-season budgets because of economic pressures

- Jennifer Williams

Gen Z shoppers recently told a Deloitte survey they expected to cut holiday spending by an average of 34%.

(REUTERS)

Economic worries aren't putting much of a dent in consumers’ holiday shopping plans, with one glaring exception: Gen Z shoppers.

More than any other generation, young adults are tightening their year-end spending budgets and shelling out less for gifts, survey data shows. That is a problem for retailers and brands that look to Generation Z—a group that runs from teens to late-20-somethings—to drive shopping trends and boost spending steadily as they earn bigger paychecks.

This year, more are taking the tack of 25-year-old Sonia Iacoboni, who has already warned loved ones that she is spending less this season. The sales-account executive is paying rent for the first time and student loans, which together eat up $2,400 each month. Those extra costs come on top of higher price tags for groceries and other essentials.

“My bank account is certainly not where it once was,” the Long Islander said she told family members in October. “So it will be, you know, a lighter Christmas for me.”

Iacoboni is fairly crafty, she said, so handmade ornaments are an option if there is time. Her younger sister might be a candidate for a dupe version of a high-end coat, handbag or pair of sunglasses. And Iacoboni is hunting for deals to keep her budget in check. “I just know I want it to not be a lot,” she said of her spending.