Americans are still in affordability mode this Thanksgiving season, whether prices have stabilized or not — and restaurants and retailers are working hard to meet the moment.
Determining if the cost of turkey day dinner has gone up this year depends on which report you read: the consumer price index puts the cost of food at home up 2.7% year over year, and Deloitte suggests prices have held relatively steady with a 0.6% increase. Meanwhile, Wells Fargo’s Thanksgiving dinner analysis estimates the cost of the year-end meal is down 2-3%, depending on the shopper’s strategy.
No matter what the forecasts say, though, consumers are wary, and what’s consistent across the board is that they’re looking for a good deal.
Francisco Martin-Rayo, CEO and cofounder of Helios AI, an agritech startup that models food supply chain risks and agricultural prices, told Business Insider that the global food supply is facing a “triple whammy” of inflation, climate concerns, and tariffs all happening at once, resulting in price volatility.
“Our models show modest easing in overall food inflation, yet certain staples are still rising,” Martin-Rayo said. “Fresh cranberries are up around 12% year-over-year, while squash and sweet potatoes are trending 5-10% higher. Consumers won’t face sticker shock, but the inflation baked into every side dish remains a real pressure point for US households.”
Shoppers are seeking deals and planning to spend less
The concerns around affordability extend beyond Thanksgiving dinner into the rest of the holiday spending season, but pinning down exactly how much consumers plan to shell out is another challenge, with inconsistent answers depending on the source.
Eating out is even more expensive than staying in, with the consumer price index showing that the cost of food away from home has increased by 3.7% this year. According to Expert Market’s Food & Beverage Report, 62% of US restaurants have increased menu prices to offset wage increases, and 47% of US restaurants increased menu prices due to the effects of import tariffs.
PwC’s Holiday Sentiment survey found that some age groups — millennials and Gen Xers, in particular — are planning to curb their spending overall, while others, namely boomers and Gen Z shoppers, plan to spend more than they previously reported when surveyed earlier this year.
Deloitte found that Gen Z is planning to spend 34% less than last year, and planned spending across generations is down 10% overall when compared to 2024 numbers.
Across reports, the thread is that consumers are seeking value wherever possible, with 64% planning to “spend more time looking for deals” this holiday season, according to the International Council of Shopping Centers. Across all income groups, Deloitte found that 7 out of 10 shoppers are “engaging in value-seeking behaviors” this year, such as joining loyalty programs or shopping at more affordable retailers, to save money.
The National Retail Federation said it expects retail spending, which includes holiday gifts, food, decorations, and other seasonal items, will exceed $1 trillion, though this year’s sales growth is expected to be slower than in prior years. And on Black Friday, one of the biggest shopping days of the year, most shoppers are planning to spend less overall, according to insights shared with Business Insider by the consumer research company GWI.
GWI found there has been a 15.9% decline in the number of shoppers planning to spend more than $650 on Black Friday shopping this year, and an increase of 43.6% in the number of shoppers who plan to spend less than $130.
Retailers are doubling down on deals
With consumers more cost-conscious, retailers are trying to attract every shopper they can, while chains like Home Depot and Target struggle with declining sales, especially among middle-income consumers.
Many, including Walmart, Sam’s Club, and Costco, have launched Thanksgiving meal bundles, ranging from $4 to $10 per serving, to try to lure in price-sensitive shoppers. Business Insider previously reported that they’re a good value, but the pre-packaged kits don’t include pantry staples like spices and seasonings, so preparing the meal may require an additional out-of-pocket expense.
Deloitte found that seven out of 10 consumers say finding the best value for their money matters more than getting the cheapest option. A holiday outlook report from PwC found that internet searches for “discount” and “coupon code” increased by 11% compared to last year, suggesting that holiday purchases remain important, but price point remains a key consideration.
“People are going to keep shopping, but with continuing concerns about tariffs and elevated prices (especially on electronics, apparel, toys, food, and household staples), value-conscious choices are likely to define the season,” the report reads.