Will U.S. Consumers Keep Their Wallets Closed This Black Friday? — What Best Buy’s Earnings Reveal About Discretionary Spending Trends

U.S. shoppers are joining Black Friday events but spending less. Best Buy’s earnings will signal where discretionary spending is heading this holiday season.

The 2025 Black Friday season is shaping up to be a paradox. Shopper participation is expected to hit multi-year highs, yet average spending is projected to decline. Many households are still dealing with inflation, tighter credit, and elevated living costs.
This is why the upcoming Best Buy earnings report has become a crucial gauge of holiday spending trends. Electronics—high-ticket items with long replacement cycles—are particularly sensitive to economic pressure, making Best Buy a real-time indicator of U.S. discretionary demand.

High Participation but Lower Spending: Why the Gap Is Growing

This year’s Black Friday traffic is set to increase across both online and in-store channels. However, surveys indicate more shoppers are browsing for deals rather than making big purchases.
Consumers are actively delaying non-essential upgrades and are relying on “best price hunting” instead of impulse buying. Early holiday promotions have also spread demand across November, reducing the traditional spending spike.

Why Electronics Are Struggling: Three Structural Pressures on Durable Goods

Electronics represent the most interest-rate-sensitive layer of U.S. consumer spending. With borrowing costs still elevated, large items like TVs, laptops, and appliances become easy to postpone.
Cost pressures also remain. Higher component and logistics prices, plus tariff-related costs, are keeping electronics prices stubbornly high.
Because replacement cycles for durable goods are long, households are more willing to wait, which has forced Best Buy to repeatedly lower sales and profit guidance throughout the year.

Data Reveals a Growing Split Across Categories and Income Segments

Headline holiday sales may show growth, but the underlying mix tells a different story. Travel, dining, and entertainment—experience-based spending—continue to outperform. Meanwhile, high-ticket discretionary goods are losing momentum across most income groups.
Lower-income households are concentrating spending on necessities, while even higher-income consumers are rethinking large electronics purchases. This shift explains why Best Buy’s traffic may improve, yet conversion and basket size remain soft.

Services Up, Electronics Down: XLY vs XLP Shows the New Consumer Playbook

ETF performance also reflects the changing spending landscape. XLY (Consumer Discretionary) maintains strength in apparel, leisure, and online services, but its durable-goods components are clear underperformers.
XLP (Consumer Staples) has remained resilient, supported by stable demand for essential categories. Inflation has made staple consumption more defensive, and this defensiveness is increasingly visible in ETF relative strength.
This widening XLY–XLP divergence underscores how consumers are reallocating budgets rather than reducing overall spending.

Three Must-Watch Signals in Best Buy’s Upcoming Earnings

Comparable Sales (Comps) Momentum

A rebound would indicate some stabilization in electronics demand. Continued declines would confirm that discretionary spending remains structurally weak.

Margin Pressure from Promotions

Best Buy must balance promotions with profitability. Strong discounting may protect sales but typically erodes margins, making this a critical data point.

FY26 Guidance and Management Tone

The language around holiday demand will shape market sentiment. A cautious tone would reinforce concerns about durable-goods demand. A neutral or mildly optimistic tone could ease fears about prolonged weakness.

U.S. consumers are not stopping spending—they’re reprioritizing it. Essentials and experience-based services remain strong, while electronics continue to face sluggish demand despite deeper Black Friday promotions.
Best Buy’s earnings and guidance will offer one of the clearest signals of how deeply this shift has taken root.

Reference

• National Retail Federation. (2025). Holiday Sales Forecast. https://nrf.com
• Deloitte. (2025). Holiday Consumer Survey. https://deloitte.com
• Best Buy Investor Relations. (2025). Quarterly Earnings and Guidance.
• ETF.com. (2025). Consumer Discretionary vs Staples Trends.