Holiday shoppers expect to trim the tree and their spending this upcoming season, according to a survey by consulting firm PwC.

Across generations, consumers said they plan to spend an average of $1,552 on holiday gifts, travel and entertainment — which represents a 5% drop from the planned holiday spending average in the year-ago period.

Yet the sharpest decline comes from Generation Z, whose members said they plan to spend 23% less on average than a year ago. That’s the biggest drop of any generation and a significant swing from last year when they said they expected to spend 37% more. Their pullback is also contributing to the overall decline in holiday spending.

“Price is Gen Z’s love language,” said Ali Furman, the U.S. consumer markets industry leader for PwC. “They’ve been raised in an era of rising costs. They’re laser-focused on value and cost transparency. For them, dupes aren’t a downgrade. They’re proof of smart shopping.”

For retailers, Gen Z customers — who span in age from 13 to 29 and have an average age of 22 — are both an opportunity and a challenge, Furman said. As they enter adulthood, they tend to have smaller salaries, new expenses and debt to pay down, she said. Plus, she said, they are experience-driven, often prioritizing concert tickets, hotel stays and plane trips over buying new items, and they’re feeling the pinch as those experiences cost more.

“Entertainment and vacations are taking up more of their wallet than they have, and therefore they have less to spend on holiday,” Furman said.

It’s also been hard for retailers to keep up with young shoppers, who “are the fastest generation to adopt trends and abandon trends,” she said.

For retailers, the survey’s findings highlight the uncertain backdrop for a holiday season that could be shaped, at least in part, by price sensitivity as companies debate how much to absorb and pass on higher tariff costs.

All other generations’ holiday spending expectations were roughly flat compared with a year ago — with the exception of baby boomers, who plan to spend 5% more on average, according to PwC’s survey, which included a representative sample of 4,000 U.S. consumers and was conducted in late June and early July.

Consumers who have already grown weary of the rising cost of living, such as higher utility bills, are also wary of potential price increases from higher tariffs, Furman said. That’s made shoppers pay closer attention to price tags and intensified their resolve to delay or shop early to get the best deal, she said.

“It’s not necessarily the tariffs themselves that are driving sentiment and behavior,” she said. “It’s the threat prices may go up, and people have a consciousness around that.”