How Seasonality, E-Commerce & Consumer Behavior Are Shaping US Retail Spending in 2025

The LendingTree study offers a long-term view of seasonal patterns in U.S. retail spending, revealing that while the December-to-January drop remains substantial (averaging 22.4%), the worst declines have become less frequent. In particular, five of its six smallest drops in its 30+-year dataset occurred in the 2020s—suggesting changes in consumer behavior, structural shifts in retail, or both. The largest drops still fall in highly discretionary categories where spending is closely tied directly to the holiday season: department stores, apparel, electronics, books, hobby goods, etc.—all of which rely on the holiday-driven spike in demand.

One major driver appears to be the rise of e-commerce and changes in how, when, and from where consumers shop. E-commerce now constitutes a much larger share of end-of-year retail sales compared to the 1990s. This increased flexibility—buy now, pay later, use of online sales during and after holidays—tends to smooth out the seasonal rollercoaster. People who missed gifts might order later, returns and replacements may happen online, and promotions may shift timing. These patterns likely contribute to the smaller declines observed in recent years.

However, the LendingTree data reflects broad long-term averages, while more immediate data from early 2025 tells a somewhat different story: the month-to-month decline from December to January was around 0.9% during January 2025, which is sizable in its own right given seasonal adjustment. Factors like extreme cold weather, wildfires, unusually strong December promotions (e.g., in autos), and inventory constraints may have exaggerated both the December high and January low.

Strategic implications emerge for retailers and investors: businesses with heavy exposure to discretionary sectors must plan for deep seasonal troughs; essential goods providers are relatively insulated. Rising prominence of e-commerce can help buffer these troughs if inventory logistics and digital operations are well managed. Furthermore, state-level retail exposure (e.g., higher proportions of businesses in retail in Mississippi, Alabama, Kentucky, etc.) suggests economic vulnerability to seasonal roll-backs in those geographies.

Open questions remain: Has the moderating post-holiday drop in 2020s been driven more by consumer behavior (e.g., earlier holiday shopping, extended returns, delayed gift buying), by secular growth in e-commerce, or by macro pressures (inflation, credit constraints)? Also, how much of the recent monthly drop stems from idiosyncratic weather or promotional distortions versus underlying consumer demand?