California shoppers are planning to splurge this upcoming holiday season, but not because they’re confident about the future. They worry about inflation and think it’s better to buy now than pay later.
At least that’s what we can take from a new report from accounting firm KPMG which shows that consumers on the West Coast are more concerned about rising prices and tariffs than those in any other region of the country.
Nationally, shoppers intend to increase their holiday spending by 4.6% this year compared to last year, spending an average of $847 on shopping, according to the report.
“When you think about why consumers are considering spending more, it’s not that they have more wallet to spare, but it’s actually an expectation that prices will increase,” Duleep Rodrigo, KPMG’s U.S. consumer and retail leader, said in an interview. “Eighty percent of consumers are also very aware of inflation and the inflation that is impacted by tariffs. »
-
Share via
Of the six regions studied by KPMG, the Pacific region – which includes California, Oregon, Washington, Hawaii and Alaska – showed the greatest concern about rising prices due to tariffs, with 72% citing inflation as their main concern.
Nationally, 8 in 10 consumers believe the tariffs will lead to price increases. Consumers in the Northeast are least concerned, where only 6% believe price increases would lead to reduced holiday spending.
“The consumer is spending like a poker player with a short stack,” Rodrigo said in the report. “They know they can’t play every hand, but are willing to go all-in on a promising hand with a high emotional payoff. There is also a psychological element in which the consumer deals with a complex set of uncertainties.”
KPMG found that consumer spending on essentials such as groceries, auto spending and personal care increased in 2025, although much less than last year. In discretionary categories such as toys, furniture and hobby items, people expect to spend less.
As budgets tighten, more people are considering spending on themselves during the holiday season, with many purchasing expensive vacation trips costing more than $1,000.
The best gifts people want to receive during the holiday season? According to KPMG, hard cash – followed by gift cards and clothing – indicates that more people want the option to spend on things they love.
Consumer price inflation in Los Angeles increased 3.3% in August compared to the same period last year. National consumer inflation stood at 2.9% for the same period, according to the U.S. Bureau of Labor Statistics.
From toys to clothing, retailers have suffered varying levels of impact due to drastic tariffs imposed by President Trump on much of the world this year.
Many retailers have absorbed the cost of the Trump administration’s tariffs, but can’t wait forever.
Rodrigo said product price increases have already started to happen with retailers being more strategic.
“Right now, consumers who are in the top 20% are probably driving 80% of the economic activity that supports and maintains the current state of the economy,” Rodrigo said. “But there’s a broader population that’s really hurting and really concerned about their money right now.”
