Americans are anxious about the economy, their own finances and the world in general — but none of that has been too much of a drag on consumer spending this year.
At least, so far.
Despite record-low consumer sentiment and persistent inflation, the current outlook on holiday 2026 at retail is positive, with industry experts, prognosticators and surveys forecasting sales gains from 2 to 6 percent, and decent profitability across the industry. Among the trends foreseen:
Low- and middle-income cohorts will spend for gifts at levels similar to last year while upper-income cohorts increase their gift spending.
Holiday shopping starts earlier than last year, triggered by Amazon Prime Days set for Oct. 6-7, a day earlier than last year.
Discounting will be at or near historic high levels, with retailers aware that consumers are pinched by rising prices. (Target has lowered prices on thousands of products this year, and on Tuesday revealed lower prices on another 2,000 home, apparel and accessories items.)
Apparel stands out, lifted by the need for better-fitting looks amid the widening use of GLP-1 drugs and mall traffic, which is seen continuing its Gen Z-led trajectory upward.
Increasing use of AI by consumers for product discovery and price comparisons, while retailers use the technology to gain efficiencies and cut costs.
The profit picture looks good. Price cuts and higher costs related to transportation and goods will squeeze margins, but that will be offset by tariff refunds and retailers using AI and other methods to cut SG&A, logistics and payroll costs.
As always, findings from holiday surveys vary due to differences in methodologies and the timing of when they’re conducted. And there is consensus among researchers and retailers that how people respond in surveys isn’t necessarily how they shop.
Attitudes vs. Action
“We continue to see this bifurcation between mood and behavior,” said Ali Furman, the U.S. consumer markets industry leader for PwC U.S., which surveyed 4,093 U.S. consumers from June 15 to June 26. Among PwC’s key findings for the Nov. 1 to Dec. 31 holiday period: gift spending dips just 2 percent despite the historic low consumer sentiment. Millennials pull back the most with an expected decline of 10 percent on gifts, and 37 percent on travel. The top five gifts will be toys, followed by clothing and footwear; screen-free hands-on activities; gift cards, and food, snacks and other consumables.
“Although the survey indicates minus 2 percent in gift spending, most likely we’ll see a very similar [retail] performance to last year of an increase between 6 and 6.5 percent,” said Furman. “We’re saying there tends to be a gap between what people say and what people do, but it’s still important to poll sentiment because it does tell us where pressure may be building, where households might be squeezed, and where strain might eventually show up if things don’t ease or change.”
As gas prices spiked in May and stayed high through the summer, “We saw very resilient spending across every single income cohort,” Furman said. “It’s not that the lower and mid-income spending is tumbling. They’re kind of staying flat, and the high income is accelerating their spend. So the gap does widen. What you do see is a little bit of a dip in savings so people can sustain their spending.”
Increasingly, shoppers are relying on AI to find deals and discover gift ideas.
Stanisic Vladimir – Adobe Stock
John Mercer, head of global research and managing director of retail research at Coresight, said: “Retail sales will grow 4 to 4.5 percent. We think retail inflation will be about 2 to 2.5 percent of that. Once we strip out inflation, the season is likely to be weaker than last year’s.”
Coresight’s findings are based on its soon-to-be-released holiday consumer survey.
“Consumers are quite cautious,” said Mercer. “They do expect to spend more than last year, but the proportion that expect to spend more is down from last year. Likewise, they expect to buy more units than last year on average, but again, the proportion that expects to buy more units is down versus last year. So it’s a weakening trend in dollar sales and real unit growth. Consumers have been much more wary since gasoline prices started spiking.”
Coresight sees an increase in resale during holidays with four in 10 consumers buying secondhand, up from about one third last year. Expectations of using buy-now, pay-later services have also increased, to 27 percent versus 24.5 percent last year. The use of AI shopping tools is “pretty much flat” versus last year at around 50 percent usage.
Mercer said consumers use AI to “plug into all these different ways to save money, whether it’s resale or buy-now pay-later to spread costs, or to find deals.” While the percent of consumers using AI to find deals and gift ideas is similar to last year, the frequency of usage by individuals is expected to go up slightly. “Possibly what we’re seeing is an entrenchment of those who use AI,” said Mercer.
Walmart and other mass merchandisers will dominate the holiday shopping scene.
Joe Raedle/Getty Images
Where Consumers Shop First
Mercer said the mass market would be the most popular channel for holiday shopping this year, followed by online marketplaces. “We did see a reduction in expectations to use online marketplaces versus last year,” from just under half of those surveyed this year, to just over half of those surveyed last year. The survey indicated that consumers had lowered their expectations of shopping Amazon and Target online, while Walmart’s marketplace is seen gaining slightly.
While some industry experts expect another season of rabid price cutting, imports are down this year, restricting products available for shoppers. And costs are higher, potentially leading to less discounting.
“There’s potentially some tension between retailers who have added distribution or logistics costs to provide faster deliveries, and consumers who don’t want to pay any more for shipping,” said Mercer. “Consumers want cheap or free shipping.”
According to Accenture’s 20th Annual Holiday Shopping Survey of 4,048 U.S. shoppers, conducted Aug. 13 to Sept. 1, holiday budgets will rise nearly 12 percent year-over-year to $737 on average. That number jumps to $829 for Millennials, but drops to $696 for Gen Z. More than half of the shoppers who plan to spend more say it’s because prices have gone up. Accenture found that consumers are more intentional about where, when and how they spend and look to AI as “a trusted, personal shopper and researcher.” U.S. shoppers expect generative AI to influence 45 percent of their holiday spending, making this the first holiday season where AI is “a mainstream channel” for shopping, Accenture reports, adding that nearly three in 10 shoppers trust an AI agent more than themselves for making holiday purchases. However, only 22 percent would allow it to decide what to buy and 8 percent would let it make purchases independently.
Disciplined, Early Shopping
Also, earlier shopping was evident in Accenture’s research, which found that nine of 10 shoppers plan to begin shopping before Black Friday, and nearly one in five consumers began holiday shopping before August this year, almost double the share recorded in 2025.
“Holiday spending remains resilient, but consumers are approaching the season with greater discipline,” said Kath Gramling, Accenture’s global consumer goods, retail and travel lead. “Our latest holiday shopping survey finds that U.S. consumers are expected to spend an average of $737 this holiday season, up nearly 12 percent from last year. Yet much of that increase reflects higher prices rather than a greater appetite to spend. We expect shoppers to start earlier, plan purchases more carefully and look for ways to stretch their budgets throughout the season.
“The role of stores remains remarkably strong. Even in an increasingly digital and AI-powered shopping environment, consumers still value the ability to see, touch and compare products before they buy,” Gramling said. “For retailers, the opportunity is to make stores a source of confidence, not just convenience, by offering expert advice, trusted recommendations and seamless connections between in-store and digital experiences. Retailers that help shoppers make informed decisions and feel certain about their purchases will be best positioned to win holiday spending.”
Kelly Askew, Accenture’s global retail lead, said: “Despite ongoing financial pressure, consumers are not pulling back on holiday shopping, but they are becoming much more deliberate about when, where and how they spend. This season, we expect shoppers to start earlier, act faster when they find a good deal and rely more heavily on technology to guide purchase decisions. For many consumers, this will be the first holiday season in which AI plays a meaningful role in shopping, helping them compare products, evaluate value and find the best options.
“For retailers, the priority is to ensure consumers and AI agents can easily access accurate product information, pricing, promotions, reviews and return policies wherever shopping decisions are made,” Askew said. “The focus should be on making products easier to discover, easier to evaluate and easier to buy by maintaining consistent information across channels and creating seamless connections between AI, digital and in-store experiences.”
Single-digit Gains
The holiday season outlook is further brightened by increasing forecasts for the year from the big players. Macy’s Inc., for example, sees sales reaching about $21.68 billion to $21.83 billion, up from the previous guidance of $21.5 billion to $21.75 billion. Walmart recently projected net sales on a constant currency basis to increase 4 to 5 percent, up from an earlier forecast of 3.5 to 4.5 percent. Last year, Walmart generated net sales of $706.4 billion.
Consumer spending is also expected to hold up for Halloween, when shoppers are seen spending $13.5 billion, up from $13.1 billion last year, according to the National Retail Federation’s annual consumer survey conducted by Prosper Insights & Analytics. “Consumers continue to make Halloween a spending priority, but they are also approaching the season with affordability in mind,” said NRF vice president of industry and consumer insights Allison Zeller. “For more than two decades, NRF’s Halloween survey has tracked how consumers celebrate the holiday, and this year’s results show that shoppers are being thoughtful and strategic, looking for ways to maximize value throughout the season.”
“AI is becoming an increasingly common part of the consumer shopping journey,” said Phil Rist, Prosper’s executive vice president of strategy. “As consumers prepare for Halloween, many are using these tools to brainstorm costumes and decorating themes, explore production options and find inspiration that help bring their celebrations to life.”
Software giant Adobe projects holiday spending online to reach $275.1 billion, up 6.7 percent year-over-year for November and December combined. Cyber Monday is expected to set a new milestone for U.S. e-commerce, with consumers spending about $15.1 billion online, up 6.2 percent year-over-year. Black Friday will be the second biggest online day of the season, Adobe predicts, totaling $12.9 billion in sales, up 9.2 percent year-over-year. Black Friday is growing faster online than Cyber Monday.
Adobe also forecast:
Amazon’s Prime Day event on Oct. 6 and 7 will generate nearly $10 billion online.
AI traffic to U.S. retail sites this holiday season will rise 130 percent.
Buy-now, pay-later services will drive $21.3 billion in sales from November through December, up 6.6 percent. Usage is set to spike on Cyber Monday, where BNPL will be used for $1.09 billion in online spend.
In other forecasts, Deloitte forecasts U.S. holiday e-commerce of $316.1 billion to $318.9 billion for November 2026 through January 2027, up 7.5 percent to 8.4 percent. Total retail is projected to grow 4 percent to 4.8 percent to about $1.7 trillion.
Bain & Co. sees holiday sales rising 4.5 percent, surpassing $1 trillion with a 9 percent leap in nonstore sales and 2.5 percent in-store growth; Mastercard predicts holiday sales (excluding auto and gas) rising 5.5 percent, with sales at store growing 3.6 percent, while online sales spike 11 percent. And software giant Adobe forecast U.S. online sales will increase 6.7 percent to $275.1 billion.
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