The holiday season may be feeling a bit less festive this year, and it’s not because the Grinch stole Christmas—rather, it’s due to major retailers like Walmart scaling back on imports of Christmas goods in response to a more cautious consumer outlook. With inflation still lingering and shoppers feeling the financial squeeze, retailers are bracing for a slower holiday shopping season.
Walmart, the world’s largest retailer, has drastically reduced the amount of Christmas-related products it’s bringing into the United States. In the 12 months leading up to September 30, Walmart imported a mere 340,000 kilos of Christmas goods—a significant drop from the 980,000 kilos it shipped in the same period last year, and a far cry from the 1.9 million kilos imported in 2022.
A Walmart spokesperson downplayed the data, saying it “only paints a partial picture,” but the overall trend is clear: the retail giant is preparing for a more subdued holiday shopping season.
According to Charles Sizemore, chief investment officer at Sizemore Capital Management, the reduced imports reflect Walmart’s expectations of “tepid” sales this season. While retail sales did unexpectedly rise in September and some recent inflation data suggests easing, consumers are still feeling the sting of higher prices. The fear of a tight budget is impacting spending habits, with 56% of U.S. consumers worried about affording this holiday season. Among Gen Z, that figure rises to 61%.
Greg Zakowicz, a senior e-commerce expert at Omnisend, explained that while consumer sentiment may be rising, shoppers are still being “intentional” with their purchases. Consumers are likely to focus on bigger, more practical buys—like electronics and clothing—especially during Black Friday sales when they can hunt for the best deals.
Retailers like Walmart are trying to lure shoppers in with lower prices and more attractive deals. This year, Walmart’s average toy price has dropped by 10%, now standing at $40.16. However, even with price cuts, the holiday season is expected to see more restrained spending, forcing retailers to adjust their expectations and inventory levels. U.S. retailers imported about 141 million kilos of Christmas goods by weight this year, a decrease from 180 million kilos in 2022, according to ImportYeti data.
The National Retail Federation (NRF) is predicting a growth in holiday spending between 2.5% and 3.5%. While that’s an improvement over last year’s 1.8%, it represents the slowest rate of growth since 2018, signaling that consumers are likely to spend cautiously.
Retailers are also adjusting their strategies for the holiday workforce. With high inflation and rising consumer debt weighing heavily on the economy, companies are hiring fewer seasonal workers this year to keep costs in check. Rather than making layoffs, many are opting for reduced hours to manage expenses.
The shortened holiday shopping season—due to the timing of Black Friday and Christmas—only adds to the challenge. This condensed window of time for retailers to capture consumer dollars may lead to a surge in last-minute shopping, further straining both inventory and delivery systems.
Despite the cautious outlook, some analysts remain optimistic. Craig Johnson, president of the retail consultancy Customer Growth Partners, believes that even with fewer Christmas decorations and toys being imported, holiday sales are still expected to rise by 4% this year. This would be a slower pace than last year’s growth, but it shows that, while the season may be more conservative, the American shopper is still willing to spend—just with a bit more restraint.
With inflation still a challenge and consumer confidence gradually improving, retailers are preparing for a holiday season that will test their adaptability. As Americans tighten their belts, the strategy for success will hinge on offering the right deals, adjusting inventory, and managing expectations in a retail environment marked by uncertainty.
