Costco Cuts Holiday Offerings as Consumers Shift Spending Habits

Costco is adjusting its holiday offerings for the 2025 season, reducing the availability of seasonal items such as Christmas trees and decorations as consumer spending patterns shift. This change reflects a broader trend among retailers responding to heightened caution among shoppers, who are prioritizing essential purchases over discretionary items.

During an earnings call on September 25, 2025, Costco’s Chief Financial Officer, Gary Millerchip, acknowledged that customers are becoming more selective in their spending. “Shoppers remain very choiceful in their spending on discretionary items,” Millerchip stated. President and CEO Ron Vachris elaborated that the company had “thinned down” its seasonal offerings, including a significant reduction in Christmas trees and other holiday displays.

Despite the trim in holiday selections, Costco reported an overall sales increase of 8% in the latest quarter, with a membership growth of over 6% compared to the previous year. While the retailer plans to stock some seasonal items like reusable Christmas trees and select decorations, customers can expect fewer options and smaller displays in-store.

Consumer reticence to spend on non-essential items is attributed to ongoing economic pressures, including high inflation and uncertainties related to global trade dynamics. Households are increasingly cautious, focusing their budgets on necessities such as food and clothing. Retail analyst Bruce Winder noted that many consumers are opting to defer purchases of seasonal decor, stating, “I think it’s probably a situation where people say, ‘I already have a tree. I already have some decor.’”

Shifting Retail Landscape

Costco’s strategy mirrors trends observed across the retail sector, as other major retailers like Canadian Tire and Dollarama adapt to changing consumer priorities. Canadian Tire reported a 9% increase in retail sales in its latest quarterly earnings, with Chief Operating Officer TJ Flood emphasizing that customer demand remains strong for essential items. Flood indicated that Christmas orders have exceeded expectations, suggesting a positive outlook for holiday sales.

Dollarama, too, has experienced growth, citing nearly a 5% rise in in-store sales compared to the previous year. Chief Financial Officer Patrick Bui remarked on the fragile state of the Canadian consumer, noting that discretionary spending continues to be impacted by economic uncertainties.

As retailers adjust their offerings, Costco’s emphasis on essentials allows for larger displays of high-ticket items such as furniture and outdoor structures. Vachris mentioned that these adjustments could lead to a more diverse product range in-store, moving away from traditional seasonal assortments.

Winder cautioned that while these changes are responsive to current consumer sentiment, they involve inherent risks. “Anytime you change assortment, you do take a chance that consumers will embrace those new items,” he said. However, he recognized the necessity for retailers to keep their offerings fresh to remain competitive.

The evolving landscape of holiday shopping signals a significant shift in consumer behavior, and retailers like Costco are navigating this transition by aligning their inventories with the essentials that shoppers prioritize. With the holiday season approaching, the decisions made now could shape the future of retail offerings and consumer expectations.