Christmas and the end of the year – The fragile balance: The global economy caught between stagnation and transformation

USA, China, Europe: Who will win the economic war under the Christmas tree?

December 13, 2025: We are not experiencing an ordinary Christmas season, but a watershed moment in the global economy – Here is an analysis of the new world order of consumption.

It's mid-December 2025. Outside, the Christmas lights are twinkling, but in the global economy's balance sheets, at best a warning light flickers. Anyone who hoped for a great economic winter miracle this year is facing a complex and sometimes sobering reality. While the markets have calmed down on the surface, and inflation seems to be under control, appearances are deceiving. Beneath the surface, a mix of structural stagnation, geopolitical tensions, and radically changed consumer behavior is simmering.

This year will not go down in history as a time of boom, but rather as the “year of great divergence.” While the US still displays remarkable, albeit crumbling, resilience, Europe—and Germany above all—is grappling with profound structural crises. But perhaps the most alarming signal comes from the retail sector itself: traditional December sales are being cannibalized by an endless “Black Month,” and today’s customer is no longer an emotional impulse buyer, but rather an AI-powered price algorithm on two legs.

The following analysis takes an unflinching look at the current state of the global economy. From the price war in the US and consumer restraint in Germany to China's transformational struggles: we examine why 2025 should be considered a "fragile truce" between growth and recession, and why 2026 could be the year of reckoning. Prepare yourself for a journey through an economic world where the old rules no longer apply.

Between artificial euphoria and structural hangover – The year of sobering realities

A glance at the calendar reveals December 13, 2025. We are in the midst of the crucial year-end shopping season, a time traditionally considered a litmus test for global consumer sentiment. But anyone expecting an untroubled festive mood this year is facing a more complex reality. The year 2025 will go down in economic history not as a year of great boom or dramatic crash, but as a year of great divergence. We see a global economy that has painstakingly stabilized at a growth rate of around 3.2 percent, but this average figures mask the enormous cracks in its foundation. While the US is once again proving remarkably resilient, Europe, and Germany in particular, continues to grapple with the structural deficits that have accumulated over the past decade.

Inflation, the specter of previous years, appears at first glance to have been tamed. We are seeing a decline in inflation rates in the G20 countries, but the devil is in the details. Core inflation is proving stubbornly persistent, particularly in the service sector. While central banks like the Federal Reserve and the ECB did loosen monetary policy somewhat during 2025, the hoped-for aggressive shift towards cheap money failed to materialize or proceeded more hesitantly than the markets had priced in. The result is an economic situation best described as a fragile truce between growth and stagnation. Added to this is a new, yet old, threat: protectionism is back. The tariffs and trade barriers tightened in 2025, especially between the major blocs of the US and China, are acting like a wrench in the works of global trade and noticeably dampening investment.

For retailers, this means an environment that could hardly be more challenging. The consumer of 2025 is not the same as they were in 2019 or 2022. They are more informed, more cynical, and above all, more price-sensitive. The narrative of pent-up demand, which dominated the years following the pandemic, has vanished. What remains is fierce competition, in which artificial intelligence is no longer just a buzzword, but has fundamentally revolutionized the way prices are compared and purchasing decisions are made.

The phenomenon of “Black Month”: Cannibalization instead of additional sales

A key aspect of analyzing this year's Christmas business is the examination of the so-called Black Week, which in 2025 has definitively transformed from a single event into an almost four-week-long discount frenzy, a Black Month. The evaluation of data from late November and early December reveals a nuanced picture that likely disappointed the hopes of many retailers. While new sales records were reported, particularly in online retail—in the US alone, e-commerce broke the $11 billion mark on Black Friday, representing a nominal increase of almost 9 percent—these figures should be interpreted with caution.

First, much of this growth is still driven by inflation. Adjusting sales figures for the price increases of the last two years often reveals only a meager increase or even stagnation in the true volume of goods sold. Second, we are observing a massive pull-forward effect. Consumers are no longer using November discounts for spontaneous additional purchases, but are instead systematically working through their Christmas lists. This is cannibalizing traditional December sales. What's on the books in November is missing from the till in December. The data clearly shows that almost 80 percent of spending on gifts was already done or at least firmly planned before Cyber ​​Monday.

Another phenomenon of 2025 is the growing skepticism of consumers towards discount promises. Surveys show that over a third of shoppers now perceive these offers as misleading or not significantly better than prices found during the rest of the year. This discount fatigue means that conversion rates often fall short of expectations despite high website traffic. Today's customers use AI-powered price comparison tools to determine the true value of an offer in fractions of a second. Impulse buying, once the holy grail of Black Friday, is increasingly being replaced by rational, data-driven purchasing based on need.

The shift in channels is also interesting. While online retail continues to gain market share – globally, well over half of all transactions are now initiated digitally – we are witnessing a renaissance of hybrid shopping. Click-and-collect and digital research before in-store purchases will be standard practice by 2025. Brick-and-mortar stores that couldn't offer a seamless digital experience lost significant ground during sales events. The winners were those platforms and retailers who had optimized their supply chains to such an extent that they could guarantee not only price but also availability.

Our global industry and business expertise in business development, sales and marketing - Image: Xpert.Digital

Industry focus: B2B, digitalization (from AI to XR), mechanical engineering, logistics, renewable energies and industry

More about it here:

• Xpert Business Hub

A topic hub with insights and expertise:

• Knowledge platform on the global and regional economy, innovation and industry-specific trends
• Collection of analyses, impulses and background information from our focus areas
• A place for expertise and information on current developments in business and technology
• Topic hub for companies that want to learn about markets, digitalization and industry innovations

Consumers in a Cold Shock: A Global Comparison of Christmas Shopping

Looking at the current Christmas shopping season in mid-December, the trend of a global slowdown is confirmed, although its intensity varies considerably from region to region. The picture is not uniformly bleak, but rather resembles a mosaic of a few bright and many dark patches. Forecasts from major associations and analyst firms, from the National Retail Federation (NRF) in the US to the German Retail Federation (HDE), paint a picture of normalization at a low level.

The Christmas shopping season of 2025 is characterized by a focus on reason. Emotional excess, buying for the sake of buying, has given way to an almost accounting-like precision. This is due not only to the real income losses of the past years of inflation, which have only been partially offset by recent wage increases, but also to a deep-seated uncertainty about the geopolitical and economic future.

USA: The resilient giant on feet of clay?

Let's start with the world's largest economy. The US will still be the engine of the Western world in December 2025, but the momentum is waning. Forecasts for the Christmas season predict nominal sales growth of between 3.7 and 4.2 percent. At first glance, this sounds solid and would mean that the magic one trillion dollar mark for Christmas sales will be surpassed. But here, too, a significant portion is due to price increases. While US consumers are proving resilient, they have become more selective. Growth is primarily driven by the upper income brackets, while middle- and lower-income households are significantly limiting their spending to essentials.

A Damocles' sword hanging over the US holiday shopping season is tariff policy. The announcement and partial implementation of new tariffs on imported goods has led retailers to try to keep prices stable, but the uncertainty is palpable. Many retailers have front-loaded their imports to avoid tariffs, filling up their inventories. This is currently creating intense pressure to offer discounts, as stock needs to be sold before the end of the year. While this is good for consumers in the short term, it's detrimental to retailers' margins.

Furthermore, we are seeing a strong shift towards services in the US. Experiences, travel, and restaurant visits are competing more fiercely than ever with traditional goods purchases under the Christmas tree. While the US labor market is cooling, it remains robust enough not to trigger panic. Nevertheless, the mood is cautious. Credit card debt has reached record levels, and savings rates are worryingly low. The 2025 holiday season could be the last hurrah before a more pronounced decline in consumption sets in in 2026, when the full impact of interest payments and the waning of pandemic-related savings takes hold.

Europe and Germany: Christmas in the shadow of the structural crisis

Looking across the Atlantic to Europe, and specifically to Germany, is more sobering. Here, economic stagnation is clearly evident. The German Retail Federation (HDE) forecast nominal growth of just 1.3 percent for the 2025 Christmas season. In real terms, adjusted for inflation, this effectively means zero growth or even a slight decline. Germany, once the economic engine of Europe, is struggling with a combination of homegrown structural problems – from high energy costs to bureaucratic rigidity – and weak global demand for industrial goods.

Consumer sentiment in Germany is fragile. While real wages have recently risen slightly thanks to collective bargaining agreements and falling inflation, these increases are not being directly translated into increased consumption. Instead, Germans are saving. The savings rate remains high, driven by fears of declining prosperity and political uncertainty. Christmas sales will therefore be extremely price-driven. Retailers report that customers are searching very specifically for deals and are extremely hesitant to make impulse purchases.

Another aspect is the gap between online and offline retail, which is particularly wide in Germany. While e-commerce can still achieve growth rates of around 4 percent here, brick-and-mortar retail in city centers is struggling. Foot traffic in pedestrian zones in many places no longer reaches the levels of the pre-crisis years. The 2025 Christmas season will further accelerate the demise of small, owner-operated retailers, while large platforms and chain stores gain market share through their pricing power. It is a Christmas of consolidation.

China: The dragon is only slowly catching its breath

In Asia, the focus naturally shifts to China. The equivalent of the Christmas shopping season there, or rather the most important indicator of consumer sentiment in the fourth quarter, is Singles' Day (Double 11) in November. Analyzing this event provides important insights for the end of the year. The year 2025 marked a turning point: major platforms like Alibaba and JD.com extended their sales campaigns to over five weeks to stimulate weakening demand. While overall sales ultimately increased (some estimates suggest growth of over 14 percent), average daily sales declined.

Chinese consumers are suffering from what economists call the negative wealth effect. The collapse of the real estate market has decimated the perceived and actual wealth of many middle-class families. When their homes lose value, they no longer have the means to spend on luxury goods and electronics. The result is extremely rational purchasing behavior. By 2025, Chinese consumers are projected to be the most demanding in the world when it comes to value for money.

This trend is expected to continue into the end of the year and the upcoming Chinese New Year (Year of the Snake, late January 2026). While the government in Beijing is attempting to counteract this with stimulus measures such as trade-in programs, consumer confidence is only slowly returning. The luxury market, a long-standing growth driver, is feeling the effects particularly hard. Western luxury brands are reporting disappointing figures from China. China is transforming from a market of unlimited growth to one of selective, quality-conscious consumption.

Japan: Hoping for a wage-price spiral

Japan offers an interesting contrast. After decades of deflation, the country is experiencing a return to inflation, which is welcomed by the government and the central bank as long as wages keep pace. Christmas sales in Japan in 2025 will be heavily influenced by the development of winter bonuses. There are indications that these bonuses will be more generous in 2024/2025, which will boost purchasing power in the short term. Nevertheless, the general mood remains skeptical. Japanese households are traditionally frugal, and rising living costs, particularly for food, are dampening enthusiasm.

Forecasts predict moderate growth for Japan, with private consumption supported by one-off government payments and subsidies. The trend toward cross-border e-commerce is particularly interesting. Japanese consumers are not only taking advantage of the weak yen for exports, but paradoxically, they are also searching online for niche international products that are unavailable domestically. While the Christmas season in Japan is less of a massive sales event than in the West, by 2025 it shows a gradual normalization toward an inflationary environment to which consumers will need time to adjust.

Conclusion and outlook: 2026 – The year of truth

In summary, for December 13, 2025, it can be stated that the global economy, and with it the Christmas shopping season, is in a phase of transformation. Easy growth is over. Growth is now achieved through discounts, driven by inflation, or supported by government intervention.

The 2025 Christmas shopping season will be characterized by three major "D"s: divergence, digitalization, and pressure. The divergence between regions (the US is robust, the EU weak, and China undergoing transformation) and income brackets is increasing. Digitalization, now massively accelerated by AI, is radically changing the "how" of shopping and undermining the viability of mid-range brick-and-mortar stores. The pressure on retailers' margins and household budgets is higher than it has been in a long time.

For 2026, it appears that the real challenges are yet to come. If tariffs take full effect, geopolitical tensions escalate further, and labor markets weaken, even in the US, the current stagnation could tip into a genuine recession. The 2025 Christmas season will therefore not be a festival of excess, but a festival of resilience – people will buy, they will give gifts, but they will hold onto their money. It's a dance on the edge of a volcano, where the music has turned down a bit, but it's still playing. For companies, this means that those who want to survive in 2026 must prove now, in these final weeks of 2025, that they can sell not just on price, but on genuine added value and relevance. Because tomorrow's customer will no longer tolerate mediocrity.

Benefit from Xpert.Digital's extensive, fivefold expertise in a comprehensive service package | R&D, XR, PR & Digital Visibility Optimization - Image: Xpert.Digital

Xpert.Digital has in-depth knowledge of various industries. This allows us to develop tailor-made strategies that are tailored precisely to the requirements and challenges of your specific market segment. By continually analyzing market trends and following industry developments, we can act with foresight and offer innovative solutions. Through the combination of experience and knowledge, we generate added value and give our customers a decisive competitive advantage.

More about it here:

• Use the 5x expertise of Xpert.Digital in one package - starting at just €500/month

☑️ Our business language is English or German

☑️ NEW: Correspondence in your national language!

Konrad Wolfenstein

I would be happy to serve you and my team as a personal advisor.

You can contact me by filling out the contact form or simply call me on +49 89 89 674 804 (Munich) . My email address is: wolfenstein ∂ xpert.digital

I'm looking forward to our joint project.

☑️ SME support in strategy, consulting, planning and implementation

☑️ Creation or realignment of the digital strategy and digitalization

☑️ Expansion and optimization of international sales processes

☑️ Global & Digital B2B trading platforms

☑️ Pioneer Business Development / Marketing / PR / Trade Fairs