Europe holiday spending outlook 2024: Focus on fashion, gadgets and travel

Welcome to Mastercard Economic Institute’s 2024 Europe holiday outlook. The story this holiday season has four parts:

Bottom line: Holiday spending is expected to be up by 2.9% (year over year, excluding automobile sales) through November-December, based on our SpendingPulse insights measuring in-store and online retail sales across all forms of payment. See the table below for our forecasts for individual European countries.

Source: SpendingPulse, Mastercard Economics Institute

Consumer fundamentals: On the upswing, but still mindful

Consumer fundamentals have strengthened compared to a year ago. The labour market remains resilient in most countries, supported by job creation and historically low unemployment rates, which have continued to decline since last year.

Headline inflation has fallen close to, or below, central banks’ targets in most countries, while wage growth remains elevated. This wedge between wage growth and inflation has led to growth in real disposable incomes and has boosted consumers’ purchasing power relative to last year. However, in several countries, purchasing power is yet to recover to levels seen before the heightened inflationary period.

 ● Wages  ● Inflation

Source: Haver Analytics, Mastercard Economics Institute


Lower inflation has enabled central banks to start reducing interest rates. This is helping to ease the squeeze on households with adjustable-rate mortgages and, in turn, supports disposable income. However, high levels of savings continue to restrain consumer spending. In 2023 and the first half of 2024, households saved a larger portion of their income, dampening spending growth. Still, with interest rates reduced, the incentive to save may be weakening in the latter part of the year.

Improved sentiment about personal finances has boosted consumer confidence, though the extent of this recovery varies across the region. In southern, central and eastern Europe, confidence has rebounded to align with long-term trends. Conversely, in northern and western Europe, confidence is improving but remains subdued against historical standards.

Consumer confidence

% net balance

● Stronger ● Weaker versus average since 2000

Note: The graphic illustrates consumer confidence trends across European countries over the past three years, highlighting a stronger recovery in Poland, Portugal and Spain.

Source: Mastercard Economics Institute


Moreover, consumers remain mindful about making large purchases. Although interest rates have started to come down, easing mortgage payments, they remain elevated. So, consumers remain reluctant to borrow to purchase more expensive items. Additionally, housing markets have yet to show a substantial recovery, which is also curbing spending on home-related purchases.

Price sensitivity: Waiting for Black Friday deals

Rising prices and interest rates have heightened price sensitivity among European consumers over the past two years, leading many to switch from higher-end to more affordable retailers. However, in parts of southern Europe and in Poland, where economic growth is stronger, consumers are beginning to trade up again, returning to premium retailers.

Source: Mastercard Economics Institute


This heightened price sensitivity led to a surge in online spending at upmarket fashion retailers during Black Friday promotions in 2023, as consumers seized the opportunity to “trade up” from mass market to premium brands at discounted prices. With price sensitivity still prevalent, similar consumer behaviour may well reappear in the 2024 holiday season.

Spending across Austria, Belgium, France, Germany, Italy, Netherlands, Poland, Spain, Sweden, Switzerland, United Kingdom

Source: Mastercard Economics Institute