In a typical year, the holiday shopping season in the United States brings with it a familiar mix of glittering shopfronts, packed car parks and mountains of online orders. But this year feels different. Inflation remains stubbornly high, unemployment is inching upward, and tariffs introduced under President Donald Trump have pushed up prices across everyday categories. Shoppers, once carefree in their festive splurging, are far more cautious with every dollar.

And so, America’s largest retailers—Macy’s, Old Navy and Walmart—are rolling out some of their boldest strategies in years, each hoping to capture the attention (and the wallets) of budget-watching consumers.

A Holiday Season Defined by Caution

Wells Fargo estimates holiday sales will grow between 3.5% and 4% this year. But once inflation is factored in, spending may be “flat at best”. In other words, shoppers may spend more in dollars but less in actual goods.

Retail economist Lauren Murphy summed up the moment bluntly: retailers are going “back to basics”, relying on sharper discounting, better merchandising and meaningful in-store experiences to pull people through the doors.

And nowhere is that push more evident than at the storied American department store, Macy’s.

Macy’s: Bringing Back the Magic

Macy’s has always understood that retail is as much about theatre as it is about product. This year, that theatrical flair is back in force.

At its iconic Herald Square flagship in New York City, Macy’s has pulled out the stops: an NBA pop-up experience, a Disney collaboration, a festive market, DJs, new brands and enough decorations to rival a film set. Even Santa Claus from the famous Macy’s Thanksgiving Day Parade is going on a national tour for the first time.

But behind the sparkle sits a serious business overhaul. Macy’s has been working through a multiyear plan to close 150 underperforming stores and invest heavily in its remaining 350. Remarkably, the retailer has just posted its first sales growth in three years.

Now, tariffs are the new challenge. Macy’s chief merchandising officer Nata Dvir explained that while the company saw price hikes coming, it worked with suppliers to offset as much as possible. In some cases, that meant upgrading materials—such as using better cashmere—rather than passing the entire cost onto customers.

“It is a science,” she said of the balancing act, “but there’s a little art that goes into it as well.”

Old Navy: Couture Meets Affordability

If Macy’s is leaning on nostalgia and in-store magic, Old Navy is betting on the power of design—and a familiar name from the world of high fashion.

The budget-friendly retailer has brought on Zac Posen, the celebrated couture designer, as its chief creative officer. His touch is already visible across the aisles: bow-tie straps on dresses, statement pockets and a blend of elegance and affordability that Old Navy hopes will resonate with families hunting for value.

This season, Old Navy’s centrepiece remains its family pyjamas, a multimillion-unit business that has become a holiday staple across the United States. But the brand is widening its creative footprint with its first-ever designer collaboration with Anna Sui.

CEO Horacio Barbeito believes technology will help Old Navy maintain momentum, particularly with RFID stock-tracking that prevents missed sales when staff can’t find items.

Despite economic uncertainty, Old Navy posted 5% revenue growth in its most recent quarter—proof, Barbeito says, that value-driven clothing can weather almost any storm.

Walmart: Winning the Race for Speed

While Macy’s focuses on experience and Old Navy on design, Walmart is waging war on delivery times.

In Greencastle, Pennsylvania, sits a 1.5-million-square-foot building that looks more like a tidy robotics lab than a warehouse. Inside, AI-powered machines construct custom boxes, sort inventory, seal packages and prepare them for shipping with astonishing efficiency.

This so-called NexGen fulfilment centre—one of four in the United States—can process 100,000 orders per day. Walmart claims that once a shopper clicks “buy”, the product can move from a digital order to a delivery-bound trailer in 30 minutes.

The maths is simple: faster processing leads to more orders, which increases delivery density, which then lowers Walmart’s operating costs—allowing it to keep prices down, even under inflationary pressure.

E-commerce growth at Walmart has surged 27%, and the company has attracted droves of middle- and higher-income shoppers who, faced with rising prices, are hunting for bargains.

AI automation has also reduced the strain on staff. In older distribution centres, workers walked up to 10 miles a day. In the new system, the longest walk is often from the car park to the workstation.

Three Retailers, One Challenge

Despite their differing strategies, Macy’s, Old Navy and Walmart share a common goal: helping customers stretch their dollars at a time when every purchase feels scrutinised.

• Macy’s leans on nostalgia, partnerships and premium quality to justify price.
• Old Navy bets on fashion credibility blended with value.
• Walmart focuses on speed, scale and ruthless operational efficiency.

All three know the stakes are higher than in previous years. Consumers are more selective. Tariffs are pushing up costs. Inflation is eating into household budgets. And competition—whether from Amazon, Shein, Temu or dozens of emerging players—is fiercer than ever.

Conclusion: A Holiday Season Like No Other

This holiday season will be a test of creativity, resilience and sheer adaptability for America’s biggest retailers. They’re not simply trying to win over shoppers—they’re trying to reassure them. And in a year marked by economic anxiety, political shifts and global uncertainty, that’s no easy task.

Yet if there’s one thing retail has always proven, it’s that innovation thrives in pressure. Whether through immersive experiences, elevated design or ultra-fast deliveries, Macy’s, Old Navy and Walmart are rewriting what festive shopping looks like—one cautious customer at a time.