Two-Tier US Holiday Spending 2025: Affluent Spending vs. Lower-Income Pullback

The 2025 US holiday season is characterized by a two-tier spending pattern rooted in structural income inequality. Affluent consumers (top 10% of earners) continue to spend on luxury dining, travel, and goods, supported by salary growth (4.5–6.7% for white-collar workers [2]) and stock market gains (13% YTD [1]). In contrast, lower-income groups face stagnant hourly wages (2.58% for blue-collar workers [3]) and high debt, leading to reduced discretionary spending. This split is visible in geographic trends—affluent areas like Soho (NYC) and Georgetown (DC) see robust activity, while other regions struggle [1].

1. Income Disparity
   : Wage growth gaps between white-collar and blue-collar workers are the core driver of the two-tier economy [2,3].
2. Spending Concentration
   : The top 10% of earners account for 50% of total consumer spending [4], making them critical for holiday sales growth.
3. Small Business Vulnerability
   : Holiday sales represent up to 50% of annual revenue for small businesses, exposing those targeting lower-income groups to significant risk [7].

• Risks
  : Small businesses catering to lower-income demographics may miss revenue targets; budget retailers could face declining sales [6,7]. KBRA warns a stock market correction could reduce even affluent spending [4].
• Opportunities
  : Luxury retailers and small businesses in affluent regions are well-positioned to benefit from continued spending by the top 10% [1,5].

• Top 10% earners =50% of consumer spending [4].
• Blue-collar hourly wage growth:2.58% [3].
• Stock market up13% YTD [1].
• Holiday sales =50% of small business annual revenue [7].