Europeans Embrace ‘Affordable Luxuries’ as Spending Expected to Rise 3.1% yoy this Holiday Period compared to last year

• Holiday retail spending across November and December forecasted to climb 3.1% yoy across Europe
• Beauty, clothing, and live events spending outpaces big-ticket purchases as shoppers embrace smaller treats
• Central and Eastern – Hungary, Poland, Czech Republic – and Spain top forecasts 

According to Mastercard’s SpendingPulse¹ data which measures in-store and online retail sales, representing all payment types, combined with Mastercard Economics Institute (MEI)’s macroeconomic forecasts, total retail spending excluding autos is projected to increase by 3.1% year-over-year (yoy) from November 1 to December 24 across Europe. European shoppers are embracing affordable indulgences, favouring fashion, beauty, and premium grocery items, while also seeking emotional value through experiences. 

Key takeaways this holiday season include: 

Overall retail spending (ex. Auto) is expected to grow 3.1% yoy. Hungary (5.2%), Poland (5%), Spain (4.8%), and Czech Republic (4.6%) show the strongest forecasted growth.

• A resilient European shopper. Despite a subdued consumer confidence, retail activity, particularly in discretionary categories, continues to trend upward across Europe. This resilience is supported by strong consumers fundamentals, including low unemployment, and recovering purchasing power, with wage growth outpacing inflation in most countries. Holiday spending is expected to reflect a cautious mindset, however, marked by price sensitivity and a preference for affordable indulgences.
• Seeking Emotional Value. In recent months, Europeans have shifted discretionary spending toward small-ticket items such as beauty/cosmetics, apparel, live experiences, and restaurants and bars —categories that remain especially popular during the festive season. Demand for big-ticket items like furniture and electronics has softened, with exceptions in Spain (electronics).
• Beauty, second-hand and going out. Beauty & cosmetics, and second-hand clothing continue to attract consumer interest, with Generations Gen Z and Alpha shaping demand and driving growth. Second-hand fashion is especially gaining traction in Spain as younger consumers embrace pre-loved options for both environmental and budget-conscious reasons.
• Holiday habits vary by country. Distinct spending patterns emerge in key retail categories: German consumers prioritise live events more than other Europeans. Czech shoppers are leading in cosmetics and in the toy and pet store categories. Italian shoppers continue to outperform other nations on home appliances, while Spaniards lead in fashion and shoes.
• Grocery baskets reflect national tastes. Grocery spending remains resilient with Europeans trading up to premium products, especially during the holidays. France leads in bakery spend, Poland in candy and jewellery. Italians spend the most on groceries over the holiday period — €39 (£32) per trip on average — with the Brits and the Germans close behind, at €37 (£31) and €36 (£30), respectively. Consumers in Czech and the U.K. ramp up their food spending during the holidays more than other Europeans: average ticket sizes grow 73% and 69% during the holiday period, respectively.
• Shopping for glitz and glam. In 2025, high-end apparel and shoe merchants have expanded their share of the online fashion market in France, Germany and the U.K. High-end merchants have also boosted market share in in-person spending in the CEE economies, where online luxury shopping is rarer. Spain shows gains for high-end fashion both online and offline.
• Europeans seek sunshine abroad. European travellers are venturing further in search of warmth. Six of the season’s trending vacation spots are outside Europe, up from just one (Marrakech) last year. Thailand and Egypt are the only countries with more than one destination on the list. Tokyo ranks eighth for winter travel after leading summer trends. 

Natalia Lechmanova, Chief Economist Europe at Mastercard says: “This holiday season, European consumers are demonstrating both resilience and adaptability. While total retail spending is expected to grow at a moderate pace, we are observing strong demand for affordable indulgences, small-ticket purchases, and travel experiences. From premium grocery items and festive favourites to long-haul winter getaways, spending patterns reflect a careful balance between prudence and enjoyment.” 

Find out more: https://www.mastercardservices.com/en/advisors/economic-consulting/insights/europe-holiday-spending-outlook-2025

ENDS 

[1] Mastercard SpendingPulse measures in-store and online retail sales, representing all payment types.