Bain projects holiday sales will top $1 trillion for the first time, but more than half of that nominal growth will come from higher prices.
Bain & Company forecast this month that U.S. holiday retail sales will top $1 trillion for the first time, driven by 4.5% year-over-year growth in nominal terms during the November-December season. But the firm cautioned that more than half of that growth will come from inflation pushing up prices rather than consumers buying more units.
Deloitte projected a broader holiday window — November 2026 through January 2027 — at between $1.70 trillion and $1.71 trillion, representing growth of 4.0% to 4.8% from the same period in 2025. E-commerce sales in that window are forecast to reach between $316.1 billion and $318.9 billion, up 7.5% to 8.4% year-over-year.
Bain noted that several categories — furniture and home furnishings, electronics and appliances, and food and beverage — are expected to see flat unit sales, with nominal gains driven by price increases alone. General merchandise, clothing and accessories, and e-commerce are expected to see both price and volume growth. Consumers surveyed by Bain said they expect clothing (43%) to displace groceries (37%) as their top spending category this holiday season.
Consumer headwinds are real. Bain pointed to high gasoline prices, tariff impacts, geopolitical uncertainty, labor market participation at a five-year low, and credit card delinquency above the 10-year average. Supporting factors include tax refunds that are up $43 billion from last year, a 23% rise in the S&P 500 year-over-year, and plans by some retailers to pass tariff refunds to shoppers as price cuts.
“While U.S. retailers have reason to rejoice this holiday season as the industry reaches the trillion-dollar milestone for the first time, there are underlying factors that will temper bottom lines,” Aaron Cheris, partner at Bain & Company and global head of the firm’s Retail practice, said in a statement.
Deloitte’s forecast rests in part on disposable personal income growth of 4.5% to 5.2% during the holiday season. “Consumers continue to place importance on making the holidays special for their friends and families, while also making deliberate choices about how they spend,” Natalie Martini, vice chair at Deloitte and U.S. retail and consumer products leader, said in a statement.
The Conference Board’s September reading showed consumer confidence at its weakest point in more than a decade, according to CNBC, with survey participants citing anxiety over rising prices and the employment outlook. U.S. retail sales rose 1.2% in August from the prior month, beating forecasts, though economists cautioned at the time that the pace was unlikely to hold as pump prices climbed and real wages moved lower.
Source: https://qz.com/