Management consultant Bain & Co., in an outlook analyzing the effects of macroeconomic trends on shopper behavior, said retail sales in the United States are on track to grow 3.5% year over year in 2026 to $5.3 trillion, down from estimated 4% growth in 2025.
Volume growth in 2026 will be modest with inflation projected to hover between 2.6% and 3%, Bain maintained.
Several key developments guided Bain’s assessment, including mounting consumer strain and waning confidence amid economic uncertainty, as well as rising unemployment and slowing labor supply growth. Bain’s Consumer Health Index showed sentiment among the higher-income U.S. households that account for more than half of spending declined in January 2026. As shoppers gravitate toward lower-priced and private-label goods, a flight to value could temper nominal sales growth, according to Bain. The consultant added consumer confidence remains fragile amid cost-of-living concerns, with households prioritizing savings over spending and rising unemployment constraining purchasing appetite. Ongoing discounting, particularly in grocery, may further limit nominal upside, the company added.
However, reduced taxes, declining fuel prices and potential interest rate cuts could brighten shopper sentiment and boost spending power, supporting Bain’s forecast for sales growth, the management consultant noted. Other factors offsetting the growth impediments include wage gains that are outpacing inflation and increased government spending on infrastructure and defense.
Outside the U.S., Bain is forecasting 2026 retail sales growth of 2% in the United Kingdom, with inflation expected to stabilize at 2.5% this year and with volume growth flat in food sales and slightly negative in non-food categories. For France, Bain predicts retail sales will gain 1.5% in 2026 compared with estimated 1.7% growth in 2025, with volume growth flat as inflation normalizes between 1.3% and 1.7%. Retail sales in Germany are likely to grow 2.5% in 2026, Bain indicated, down from 3.6% in 2025 as inflation continues to hover around 2.2% this year, supporting moderate underlying volume growth.
“Consumers continue to face financial pressure, driving our forecast for slower retail sales growth in the U.S. and Europe in 2026,” said Aaron Cheris, global head of Bain’s retail practice. “This year’s industry leaders will need to sharpen their customer value propositions, giving shoppers compelling reasons to choose them over competitors and AI platforms. They must utilize AI in ways that expand the value-creation capability of the entire business.”
