2026 Global Retail Sales Outlook

Bain expects US retail sales to grow 3.5% year over year in 2026, a slight slowdown from 2025’s expected 4.0%. Volume growth will be modest, with inflation expected to hover between 2.6% and 3.0% this year. Several indicators point to mounting consumer strain. Ongoing geopolitical and economic uncertainty is weighing on consumer confidence. In particular, Bain’s Consumer Health Index shows that the outlook among upper-income households—who account for more than 50% of spending—declined in January. At the same time, employment trends are softening: Unemployment is edging higher, and labor supply growth is slowing. And as shoppers increasingly gravitate toward lower-priced and private-label goods, it’s possible a “flight to value” could temper nominal sales growth. Still, meaningful offsets could help retailers reach our projected $5.3 trillion in sales. Reduced taxes—including lower federal income taxes and the elimination of taxes on tips and overtime—combined with falling fuel prices and potential interest rate cuts may bolster shopper sentiment and spending power.

In the UK, we forecast 2% sales growth in 2026. With inflation at 3.2% in November and projected to stabilize around 2.5% this year, volume growth will likely be flat in food and slightly negative in non-food categories. Consumers continue to navigate persistent cost-of-living pressures: Essentials and services inflation is proving sticky, and mortgage rates remain elevated. Consumer confidence is fragile—and rising unemployment is adding to their caution. Discretionary demand will likely stay subdued, as value-focused shoppers trade down and seek discounts. One bright spot: Recent interest rate cuts, with the potential for more to come, could offer modest relief. However, meaningful effects on disposable incomes are unlikely before 2027.

France will likely deliver near-flat growth at 1.5% in 2026 vs. 1.7% in 2025. With inflation expected to normalize between 1.3% and 1.7%, this implies largely flat volume growth. Economic headwinds persist, as political uncertainty weighs on consumer confidence. Rising unemployment—reaching 7.7% in October—is pressuring household finances. Rent inflation is accelerating, and although mortgage rates are declining, they remain above prepandemic levels. Even so, conditions are unlikely to deteriorate materially this year. Elevated savings and a declining household debt-to-income ratio are helping cushion budgets, contributing to positive sales growth.

Bain expects Germany’s retail sales to grow 2.5%, down from 3.6% in 2025. With inflation expected to hold at around 2.2% in 2026, this outlook implies moderate underlying volume expansion. Consumer confidence remains fragile in the face of geopolitical uncertainty and ongoing cost-of-living concerns. Households’ propensity to spend is low, while propensity to save is high. Rising unemployment, partially linked to weak industrial output and high-profile factory closures, is constraining spending appetite. In addition, it’s possible that continued aggressive discounting—especially in grocery—could further limit nominal upside. On the plus side, wage growth is outpacing easing inflation, and increased government spending in infrastructure and defense should provide some support.

How can retailers win in this lower-growth environment? This year's industry leaders will sharpen their customer value proposition, giving shoppers clear, compelling reasons to choose them over competitors and AI platforms. They'll also reinvest AI-enabled productivity gains back into their people to make work simpler and more rewarding, strengthening employee trust. Above all, their C-suite will be tightly aligned around a cohesive strategy and will utilize AI in ways that expand the value-creation capability of the entire business.