NEW YORK— September 9, 2025— In its annual US retail holiday forecast, Bain & Company predicts healthy but below-average sales growth this season. The firm forecasts a 4% year-over-year (YoY) increase in retail sales in November and December, reaching more than $975 billion. That compares with a 10-year average of 5.2%, underscoring consumer caution, though rising wages, stock market strength and potential interest rate cuts could help boost holiday sales. 

In-store sales gain momentum, while nonstore growth moderates 

Bain’s survey of US consumers shows, when compared to last year, consumers expect to do more in-store shopping. Bain estimates in-store sales will grow 2.75% (YoY), contributing 2% of overall growth, with the strongest gains in clothing and accessories, general merchandise (excluding department stores), and health and personal care, which are poised to grow 5% or more. In contrast, sales experienced by other sectors such as electronics and appliances, building and garden, and furniture stores are expected to decline, Bain found.  

Growth from nonstore sales, which includes e-commerce and mail orders, have slowed to 7% — a decrease from 9-10% growth seen by nonstores during the same period in the last two years. Although this is the case, nonstore sales are still expected to account for half (50%) of all sales growth overall, the report concludes.  

Headwinds weigh on shoppers, but tailwinds may support holiday sales growth 

Bain’s proprietary Consumer Health Index shows that US households across income groups reported a worsening fiscal outlook in August. Among upper-income households — those who account for 54% of consumer spending — both outlook and intent to spend remain elevated compared with last year, though recent data shows they are slowing. 

Financial strain is evident. Severe credit delinquencies (90 or more days overdue) have risen about 3% YoY, reaching their highest level since 2011, particularly among borrowers under age 30. Savings rates remain low, and labor force participation fell 0.4 percentage points in August compared with a year earlier, marking the fourth consecutive monthly decline and reversing the upward trend seen since the pandemic. 

Despite these pressures, several factors could help support nominal sales growth. Average hourly wages grew 3.7% YoY in August, outpacing inflation growth and consumer price index (CPI) which grew just 3.1%, giving many consumers more confidence and spending power. The S&P 500, a benchmark US stock index, is up 21% compared with 2024, likely boosting wealth perceptions among higher-income households. The potential for interest rate cuts could also bolster consumer sentiment heading into the holidays.  

“This holiday season will be a mixed one for US retailers,” said Aaron Cheris, partner in Bain’s Retail practice. “Consumers are cautious and facing financial pressure, but they are also feeling the lift from higher wages and a strong stock market. Leading retailers will strike the right balance — leaning into value, creating warm human experiences while implementing new technologies, and capitalizing on big events like Black Friday to capture share from competitors.” 

Four ways retailers can outperform this holiday season 

1. Go big on sales events. Ten percent more consumers plan to shop on Black Friday and Cyber Monday compared to last year. 

2. Lead with sharp Key Value Items (KVI) pricing and emphasize value. With 55% of shoppers saying high prices will affect their holiday budgets, it’s important that retailers stress value over price. 

3. Keep experiences warmly human, even with AI. As more consumers plan to shop in store, retailers should enhance frontline staff with technology while keeping service personal. 

4. Use timely, personalized ads. With 30% more consumers open to sponsored ads this year, well-targeted campaigns can influence shopping decisions. 

This is the first of a series of retail holiday news updates that Bain & Company will publish through January 2026. 

Media contacts   

For any questions or to arrange an interview, please contact: 

Dan Pinkney (Boston) — dan.pinkney@bain.com 

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