Department Stores NAICS 455110

Nov 3, 2025 - NRF Forecasts Second-Highest Holiday Spend on Record

• US consumers plan to spend an average of $890.49 this holiday season, marking the second-highest total in 23 years and offering department store retailers a strong opportunity to capture seasonal demand, according to the National Retail Federation and Prosper Insights & Analytics. Per the report, 44% of shoppers plan to visit department stores, positioning them as a key destination alongside online and grocery channels. Of the total spend, $627.93 will go toward gifts, with the remainder allocated to food, decorations, and greeting cards. Early shopping remains popular, though 63% of consumers expect to make most purchases during Thanksgiving weekend. Retailers are responding with competitive promotions and value-driven assortments to meet demand amid economic concerns and tariff pressures. Gift cards and clothing top wish lists, aligning well with department store offerings.
• The Retail Trade Industry is one of seven industries reporting contraction in September's Services ISM Report on Business. Executives in the Retail Trade industry reported increases in employment and order backlogs, along with faster supply deliveries and decreases in new orders, imports, and inventories in September. Additional industries reporting contraction during the period were Mining; Agriculture, Forestry, Fishing & Hunting; Construction; Management of Companies & Support Services; Professional, Scientific & Technical Services; and Real Estate, Rental & Leasing. Ten industries reporting growth during the period were Accommodation & Food Services; Health Care & Social Assistance; Other Services; Information; Public Administration; Educational Services; Wholesale Trade; Finance & Insurance; Transportation & Warehousing; and Utilities. Overall, economic activity in the services sector was unchanged in September, with the Services PMI registering 50%.

• In August, regional department store chain Dillard’s partnered with mixed-use developer Trademark Property to buy the Longview Mall in eastern Texas from WPG, according to Retail Dive. The report noted that Longview is considered an “evergreen mall,” due to being the only enclosed regional mall in a 45-mile radius and a critical part of the region’s retail landscape, attracting 3.7 million visitors annually. The new owners plan to upgrade the property and the tenant roster. Analysts see the potential for future mall investments by Dillard’s, depending on the success of its Longview Mall location. According to Brynn Feller, an SVP at commercial real estate firm Northmarq, “For Dillard’s, I think this is a bit of a case study. I don’t think that for them this is a playbook that they’ve rolled out — I think they’re developing it in real time. And I think it’s potentially brilliant.”
• Softening consumer confidence and sentiment in October 2025 may dampen discretionary spending, posing challenges for retailers ahead of the holiday season. The Conference Board’s Consumer Confidence Index edged down to 94.6 from 95.6, as improved current conditions (Present Situation Index up to 129.3) were offset by weaker short-term expectations (Expectations Index down to 71.5). Inflation expectations rose to 5.9%, and over half of consumers anticipated higher interest rates. Holiday spending is projected to fall, with promotions driving purchasing decisions. Meanwhile, the University of Michigan’s Index of Consumer Sentiment dropped 2.7% month-over-month to 53.6, a 24.0% year-over-year decline. The Current Economic Conditions Index fell to 58.6, and the Expectations Index to 50.3, down 32.1% annually. Year-ahead inflation expectations eased to 4.6%, while long-run expectations rose to 3.9%, with increased uncertainty across both horizons.