Retailers across Europe may be in for a stronger 2025 holiday season, as Mastercard’s latest forecast suggests shoppers will increasingly reach for “affordable luxuries” rather than high-end items.
The analysis highlights a shift toward smaller indulgences and experiences — a potential boost for businesses focusing on value-led, discretionary categories.
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Holiday spending expected to grow by 3.1 %
According to Mastercard’s 2025 holiday outlook, overall retail spending (excluding automotive) across Europe is projected to rise by approximately 3.1 per cent year on year over the main holiday shopping period, which runs from 1 November to 24 December.
Countries anticipated to lead the growth include Hungary (around 5.2 %), Poland (about 5.0 %), Spain (4.8 %) and the Czech Republic (4.6 %).
Even in the face of cautious consumer confidence across some markets, Mastercard underscores that stable labour markets and modest improvements in household purchasing power are lending resilience to overall spending.
Smaller gifts and experiences over big-ticket items
Rather than splashing out on expensive goods, many consumers are expected to opt for smaller treats that still deliver value or emotional appeal. Categories likely to see strong demand include beauty and cosmetics, apparel and shoes, dining, and live events.
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By GlobalDataBig-ticket segments such as furniture and high-end electronics seem less likely to rebound in force, though electronics may retain some momentum in certain markets — particularly Spain.
Another trend emerging among younger shoppers, especially Gen Z and Gen Alpha, is interest in second-hand clothing, driven by both budget awareness and environmental concerns. This seems especially notable in Spain, where such demand is growing.
Implications for retailers and supply-chain strategies
For retailers and supply-chain managers, this outlook suggests that success through the festive period may depend on aligning product mix and promotions with consumer preferences for value and flexibility.
Stocks and promotions skewed toward smaller-ticket, affordable luxury items and experiential offerings — rather than luxury or luxury-priced big items — could prove most effective.
Omnichannel retailers may benefit from blending online convenience with experiential and value-driven offers in-store. Given the variation between countries, region-specific merchandising, marketing and inventory strategies may be more effective than a uniform pan-European approach.
Promotional activity, loyalty rewards and bundled offers may resonate strongly with shoppers who remain price sensitive but still seek emotional or experiential value — whether through gifts or experiences.
In a landscape marked by economic caution and uncertainty, Mastercard’s holiday forecast suggests European retail may still see a meaningful boost in festive spending — provided retailers lean into affordability, experience and value rather than extravagance.
