As the 2025 holiday shopping season winds down, one clear message is emerging from U.S. retail leaders: American consumers are still spending, but only when they feel they are getting real value for their money. According to Tanger Outlets CEO Stephen Yalof, widespread discounting and promotional activity played a critical role in sustaining foot traffic and sales across retail centers during a period marked by economic uncertainty and softening consumer confidence.
Speaking Tuesday on CNBC’s Money Movers, Yalof said retailers have adjusted their strategies to better align with today’s cautious yet determined shoppers. While consumers may be uneasy about inflation, tariffs, and broader economic pressures, they have not stopped spending altogether. Instead, they are becoming more selective, gravitating toward retailers and locations where discounts, perceived value, and pricing transparency are front and center.
“Retailers are discounting to meet the consumer, and the consumer is responding by shopping,” Yalof said during the interview. “What we’re seeing is resilience. People still want to spend, but they want to feel smart about how they’re doing it.”
Strong Holiday Traffic Despite Economic Anxiety
Despite a notable decline in consumer sentiment over the past several months, Tanger’s outlet centers experienced strong activity throughout the key holiday shopping period. Yalof described full parking lots, steady crowds, and consistent foot traffic across November and December, traditionally the most important months of the retail calendar.
Tanger, which operates outlet shopping centers across the United States and Canada, specializes in offering name-brand and premium products at discounted prices year-round. That model, Yalof suggested, has become even more appealing as shoppers weigh rising living costs against their desire to maintain spending habits.
“Our customers are coming into environments where they can buy premium products that might normally feel out of reach at full price,” Yalof explained. “But because those products are value-priced every day, consumers feel more comfortable making those purchases.”
This approach, combined with aggressive holiday promotions, helped retailers within Tanger’s portfolio maintain momentum during a season that many analysts feared could underperform.
Spending Trends Defy Consumer Confidence Data
Yalof’s observations are supported by recent data showing that consumer spending has remained surprisingly strong, even as surveys suggest Americans feel increasingly pessimistic about the economy.
According to preliminary figures released by Visa, U.S. retail spending during the holiday season rose 4.2% year over year on a nominal basis. The data, which tracks payments activity beginning November 1, indicates that consumers continued to open their wallets despite inflationary pressures and ongoing uncertainty.
In-store purchases accounted for approximately 73% of total holiday spending, underscoring the continued relevance of physical retail locations. Meanwhile, online sales drove much of the growth, rising nearly 8% compared with the same period last year.
This combination of strong in-person shopping and accelerating e-commerce highlights a hybrid consumer behavior pattern, where shoppers are comfortable moving between digital and physical channels depending on convenience, price, and experience.
Confidence Slips as Price Pressures Persist
While spending numbers remain healthy, consumer sentiment tells a more cautious story. The Conference Board reported that its consumer confidence index fell sharply in December, declining nearly four points to 89.1. The drop reflects growing anxiety among Americans about high prices, geopolitical uncertainty, and the potential impact of new and existing tariffs.
Concerns intensified earlier in the year when the Trump administration implemented sweeping import duties affecting a wide range of U.S. trading partners. Those policies, combined with stubbornly high inflation in essential categories such as housing, food, and energy, have weighed heavily on household outlooks.
Similarly, the latest CNBC All-America Economic Survey found that 41% of Americans planned to spend less during the 2025 holiday season, an increase of six percentage points from the previous year. Many respondents cited higher prices and reduced discretionary income as primary reasons for pulling back.
Yet, as Yalof and others have noted, stated intentions do not always translate directly into behavior at the checkout counter. Instead of cutting spending entirely, many consumers appear to be trading down, hunting for promotions, and prioritizing value-driven retailers.
Discounting as a Strategic Necessity
For retailers, this shift has made discounting less of a seasonal tactic and more of a strategic necessity. Yalof said brands across Tanger’s portfolio leaned heavily into promotions, recognizing that shoppers were willing to buy — but only when pricing aligned with their expectations.
Rather than signaling weakness, Yalof framed discounting as a pragmatic response to evolving consumer psychology. In an environment where shoppers are hyper-aware of prices, transparency and perceived fairness can be powerful drivers of loyalty.
“Consumers want to feel like they’re winning,” he said. “They want to know they’re getting quality and value at the same time.”
This mindset has helped outlet centers, in particular, stand out. Unlike traditional malls that often rely on full-price sales, outlets are built around the promise of everyday savings, making them well-suited to today’s cautious spending environment.
Brick-and-Mortar Retail Shows Staying Power
Looking ahead, Yalof expressed optimism about the future of physical retail, pushing back against the long-standing narrative that brick-and-mortar shopping is in decline. According to him, retailers are increasingly eager to expand their physical footprints, particularly as department stores continue to consolidate and reduce locations.
“Retailers want stores. They love bricks and mortar,” Yalof said. “More brands want to control their own physical presence rather than relying on third-party department stores.”
This trend reflects a broader shift toward experiential retail, where stores serve not just as points of sale but as brand-building environments that complement online channels. Outlet centers, with their open-air layouts and destination appeal, are well-positioned to benefit from this evolution.
Looking Toward 2026
As retailers begin planning for 2026, Yalof said the mood remains cautiously confident. While economic headwinds persist, brands appear encouraged by consumers’ willingness to continue spending when value is clearly communicated.
For Tanger and its retail partners, the lesson from this holiday season is clear: meeting the consumer where they are — financially and emotionally — is essential. Discounts, promotions, and transparent pricing are no longer optional tools but core components of a successful retail strategy.
“Customers are resilient,” Yalof said. “They want to spend. You just have to give them a reason to feel good about it.”
As the retail industry adapts to shifting consumer priorities, the 2025 holiday season may ultimately be remembered not for restraint, but for a recalibration — one in which value, flexibility, and smart discounting defined success.