The largest retailers in the United States are making significant efforts this holiday period to distinguish themselves and draw in hesitant shoppers. Due to President Donald Trump’s tariffs, persistent inflation, and increasing joblessness, Americans are becoming more cautious about their holiday expenditures.
Wells Fargo anticipates that overall holiday sales this year will increase by a range of 3.5% to 4% compared to the previous year. However, once the effect of inflation-driven price hikes is factored out, actual spending might remain stagnant.
Lauren Murphy, a retail economist at Wells Fargo, communicated to CNN that “This year is truly about returning to core principles, capitalizing on excellent merchandising, ensuring strong discounts, and making certain that (retailers) are getting customers through the door this holiday season.”
Macy’s, the established department store chain, is reinventing its in-store atmosphere to court doubtful customers. Budget-oriented Old Navy is capitalizing on the allure of Zac Posen, a couturier who transitioned into the role of chief creative officer. Furthermore, even the globe’s biggest retailer, Walmart, is guaranteeing an online order-to-delivery-truck turnover time of just 30 minutes.
Leaders from all three corporations informed CNN that, irrespective of escalating costs, they are dedicated to assisting patrons in maximizing their budgets and obtaining greater value.
Reintroducing Macy’s Allure
Macy’s is returning to its origins, hoping to transport patrons back to the era of glamorous department stores.
At its major New York City location, customers will find half a dozen collaborations, including an NBA Experience and an exclusive Disney partnership. The store itself shines with festive lighting and decor, featuring an indoor holiday market, a DJ, and the introduction of new brands.
Macy’s renowned Santa from the Thanksgiving Day Parade, who traditionally concludes the parade to inaugurate the holiday season, is undertaking his inaugural cross-country tour, visiting various stores.
Decorations for Macy’s Thanksgiving Day Parade and the holidays are showcased outside Macy’s Herald Square, with the Empire State Building visible in the background, in New York City on November 24, 2025.
Decorations for Macy’s Thanksgiving Day Parade and the holidays are showcased outside Macy’s Herald Square, with the Empire State Building visible in the background, in New York City on November 24, 2025. Kylie Cooper/Reuters
Nata Dvir, Macy’s chief merchandising officer, explained to CNN, “We’ve observed that the customer is considerably more selective this year.” She added, “I believe there are numerous shopping avenues available to them, so we are ensuring that strong product offerings are paired not only with quality and value but also with a compelling experience.”
This represents a calculated risk, testing a multi-year initiative aimed at attracting customers and revitalizing Macy’s remaining physical locations. The mid-tier department store has successfully resisted activist investors amidst declining sales figures. Last year, Macy’s revealed plans to shutter 150 underperforming locations by 2026 while concurrently boosting investment in customer service and inventory at its remaining 350 stores.
The strategy appeared to be yielding results, as Macy’s recently reported its first sales growth in three years. However, like all retailers, it now has to contend with the impact of tariffs.
Shoppers frequent Macy’s Herald Square in the lead-up to Black Friday and Christmas in New York City on November 24, 2025.
Shoppers frequent Macy’s Herald Square in the lead-up to Black Friday and Christmas in New York City on November 24, 2025. Kylie Cooper/Reuters
Nata Dvir, Macy’s Chief Merchandising Officer, during a conversation with CNN’s Vanessa Yurkevich.
Nata Dvir, Macy’s Chief Merchandising Officer, during a conversation with CNN’s Vanessa Yurkevich. CNN
The retail chain plans for the holidays nearly a year ahead, procuring items from over 25 nations. Macy’s collaborated with suppliers to maintain low prices across as many product segments as feasible. Nevertheless, Dvir indicated to CNN that certain price increases are unavoidable for items such as toys and sweaters.
“Although we foresaw the tariffs approaching, our endeavor was to truly counterbalance that expense by enhancing the product itself,” she stated.
This translates into investing in superior materials, like cashmere, with the hope that customers will perceive the enhanced quality as justifying the price.
As the holiday period progresses, Macy’s utilizes its internal economists to interpret the implications of the latest economic data for its clientele, enabling Macy’s to agilely adjust its product mix and pricing strategies.
Dvir noted, “While it is a precise discipline, there is also an element of intuition involved.”
Injecting Couture into Old Navy
Millions of units. Twenty-two distinct designs. Pajama pants priced at $5.
If the holiday season is CEO Horacio Barbeito’s “Super Bowl,” then the company’s family pajamas are its championship-winning play. These seasonal sleepwear sets represent a multi-million dollar enterprise and one of the company’s most significant sales events by volume.
However, Old Navy, which operates stores in 49 of the 50 states, will need more than just festive pajamas to appeal to budget-conscious consumers this holiday season. Consequently, the brand is also relying on its maiden designer capsule collection with Anna Sui, alongside new styles conceptualized by one of America’s most celebrated high-fashion designers, Zac Posen—now serving as Old Navy’s chief creative officer.
Zac Posen, Chief Creative Officer of Old Navy, during an interview with CNN’s Vanessa Yurkevich.
Zac Posen, Chief Creative Officer of Old Navy, during an interview with CNN’s Vanessa Yurkevich. CMM
Posen shared with CNN inside Old Navy’s Times Square location, “This opportunity was unparalleled; this is the brand that outfits America.” Posen highlighted specific design elements he incorporated into the garments on display, such as bow-tie shoulder straps and pockets on a taffeta holiday dress.
Old Navy forms a vital component of its parent company, Gap Inc. The corporation reported better-than-anticipated profits for its third quarter, with Old Navy specifically demonstrating a 5% year-over-year revenue increase.
Yet, consumers are exercising restraint with their spending, and tariffs continue to impact Old Navy’s inventory. The retailer has implemented RFID technology, enabling associates to instantly ascertain inventory levels and locate merchandise within stores, thereby expediting product retrieval and preventing customers from leaving empty-handed and resulting in a lost sale.
A shopper holds an Old Navy bag in San Francisco, California, on November 19, 2025.
A shopper holds an Old Navy bag in San Francisco, California, on November 19, 2025. Brennan Smart/Bloomberg/Getty Images
Barbeito asserted that, within their sector, “This is game-changing.”
The CEO firmly maintains that Old Navy’s dedication to value ensures it will “not participate” in the economic instability plaguing the market. Posen expressed confidence that the brand will succeed irrespective of the obstacles encountered.
Posen remarked, “Every year brings its unique set of difficulties. Sometimes it’s the economy, sometimes it’s the weather, occasionally it’s a change in administration,” he noted. “Ultimately, people desire to look and feel good, and that fundamental desire persists. I believe when circumstances become more demanding, we rise to meet the occasion.”
The Urgency of Speed at Walmart
In Greencastle, Pennsylvania, there is a 1.5 million square-foot fulfillment center where automation handles the majority of online order processing and packaging.
Machinery powered by artificial intelligence constructs custom-sized boxes for every order, sorts the merchandise, and seals the carton. Associates work alongside these machines amid the gentle whir of automation.
This state-of-the-art facility, one of four such “NexGen” fulfillment centers across the nation, is central to Walmart’s strategy to secure customers this holiday season by offering unmatched speed. America’s largest retailer claims this center can process 100,000 packages daily.
Walmart’s Greencastle, Pennsylvania, fulfillment center
Walmart’s Greencastle, Pennsylvania, fulfillment center CNN
Barat Smith, vice president of operations for Walmart’s US supply chain, told CNN, “The moment you click purchase, we have the capability to move the item from the digital space onto a truck heading to your residence in under 30 minutes.”
Walmart enters this holiday season with a competitive advantage, bolstered by robust earnings reports. Revenue grew by 5.8% in the most recent quarter, with e-commerce showing a significant 27% surge. As prices have climbed since the Covid-19 pandemic began, Walmart has attracted a greater number of middle- and upper-income shoppers who are seeking better value.
However, Walmart confronts substantial competition in the online shopping arena this holiday season—facing off against the giant Amazon, as well as budget-friendly Chinese drop-shippers such as Temu and Shein.
AI-powered machinery creates bespoke boxes for each order, sorts the items, and seals the container at Walmart’s Greencastle facility.
AI-powered machinery creates bespoke boxes for each order, sorts the items, and seals the container at Walmart’s Greencastle facility. CNN
David Guggina, Walmart’s executive vice president and chief e-commerce officer, stated to CNN, “Our focus is on maintaining everyday low operational costs so that we can consistently provide everyday low prices to the consumer.” He continued, “In this context, we are emphasizing speed. If we create a superior customer experience that generates increased orders, that volume drives density, and density permits us to reduce our operational expenses.”
These fulfillment centers are twice as efficient as Walmart’s older facilities and manage half of the company’s total volume.
Walmart personnel interact with packages only five times, a stark contrast to legacy fulfillment centers where associates averaged 12 procedural steps per item.
Smith remarked, “In some of our older facilities, our associates might cover nearly 10 miles daily walking. Now, the maximum distance they walk is from their vehicle to their workstation.”
About the Author
