2026 Holiday Shopping Outlook

Will holiday growth keep giving?

Bain forecasts 4.5% growth, slightly above the last few years. We expect in-store sales to grow by 2.5%, in line with the last two years, whereas we expect nonstore sales to grow by 9%, returning to higher growth.

Total growth In-store growth Nonstore growth

• Total growth
• In-store growth
• Nonstore growth

Sales are set to exceed $1 trillion for the first time

Nearly 70% of the holiday season total will come from in-store sales, but e-commerce continues to gain share. ​ 

Holiday spending faces mixed signals

Retail sales have climbed across most categories this year. But macroeconomic uncertainty could still tip the holiday season in either direction. 

There are several bright spots:

• Consumer resilience. Despite many headwinds, shoppers keep spending. Retail sales are up 5.3% year over year as of July.
• Strong stock market. The S&P 500 is up 23% year over year, buoying the outlook of upper-income households.​
• Higher tax refunds. US refunds are up $43 billion this year, or 17% year over year, putting more cash in consumers’ wallets. But Bank of America estimates about half of that windfall has already gone to gas.​
• Retailer price cuts. Several retailers plan to pass tariff refunds along to shoppers as lower prices. Those cuts, and how loudly retailers advertise them, could lift traffic and spending this holiday season.

But a few pressures could dampen spending:

• Consumer caution. Continuing its downward trend, consumer outlook is lower than it was this time last year, weighed down by tariffs and geopolitical uncertainty. 
• Elevated gas prices. At around $4.21 a gallon, gasoline is still squeezing household budgets.
• Labor market softness. The unemployment rate remains stable at 4.1%, but labor force participation has fallen to a five-year low at 61%. Aging demographics, slower immigration, and weaker labor demand are dragging on participation. 
• Shoppers' financial strain. The personal savings rate fell to 2.7% in June, giving consumers less to fall back on. Credit card delinquencies sit above the 10-year average. And roughly $1 billion less in SNAP benefits reached low-income households in May vs. last year, leaving them with tighter budgets heading into the holidays.​

Inflation is another important factor, but it cuts both ways. At 3.4%, headline inflation is outpacing July's nominal wage growth of 3.1%, squeezing purchasing power. But strip out gas and energy, and prices are rising 2.5%, slower than wage growth. In addition, inflation is a major contributor to retailers’ nominal sales growth.​

Online and AI keep gaining ground

Most consumers expect to do their holiday shopping online. Amazon remains a popular starting point, but shoppers are increasingly looking to other retailers’ sites and AI platforms.

What’s more, an additional 13% of online shoppers say they plan to use a retailer's own AI shopping agent, such as Walmart’s Sparky or Amazon’s Alexa for Shopping.

Four tips can help retailers win shoppers this season

The lines between channels, categories, and retail formats keep blurring. AI discovery now shapes the top of the funnel. Bolt-on marketplaces have erased the boundaries between category killers: Toys and strollers show up on consumer electronics sites, while sports memorabilia turns up on luxury department store sites.

Standing out against lookalike retailers is no longer enough. In addition to reevaluating their true competitive set and sharpening their value proposition, seasonal winners will get four things right:

1. Get in the zone on price. Financial pressures have pushed price sensitivity to the forefront of purchase decisions again, and always-on, AI-enabled comparison makes the gaps easier to spot than ever. Retailers outside the reasonable band on price will drop out of the consideration set before loyalty, perks, service, or experience gets a vote. Price key value items (KVIs) and easily cross-shopped items competitively, for both humans and bots.
2. Emphasize what can’t be cross-shopped. When everyone carries the same SKU, price quickly becomes a race to the bottom. Differentiation will come from exclusive assortments that can’t be price-matched line for line, whether distinctive owned brands, unique offerings in specific categories (e.g., prepared holiday meal bundles), or exclusive partner products.
3. Win the big days. More than 90% of shoppers plan to shop Black Friday, Cyber Monday, or another major sales event. Stand out at those high-intent moments with personalized promotions and can’t-miss events that win earned media, while amplifying with paid media so shoppers are aware.
4. Invest in the customer experience, using AI to bolster it. Emotional stakes are high over the holidays, so a bad experience travels further than it would at any other time of year. The late package or the unresolved problem is what shoppers remember, tell their friends about, and carry into next year’s purchase decisions. New technology can be pointed at preventing those moments, instead of just stripping out costs.

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The authors would like to acknowledge Anshula Batra, Megha Dasgupta, Sakshi Goyal, Sanket Anil Waghmare, Shaurya Singh, Anshika Gupta, Mariana Hortega, and Valentina Vellinho Nardin for their contributions.