US holiday retail sales set to outpace last year's seasonal growth performance to exceed $1 trillion for the first time--Bain & Company forecasts

US retail sales to grow 4.5% YoY in crucial holiday shopping season in November-December Online shopping to accelerate further with nonstore sales expected to grow 9% YoY, driving ~ 60% of nominal sales growth; in-store sales growth to be similar to last year Retailers face headwinds as shoppers' budgets remain under pressure due to inflation and stalled wage growth. Inflation will account for more than half of the nominal rise in salesUS retail sales over the upcoming November-December holiday shopping season, crucial for retailers' trading, are poised to set a new record this year and top $1 trillion for the first time, Bain & Company forecasts today.The new all-time high for holiday sales is expected to be driven by 4.5% year-on-year (YoY) growth in nominal terms – well ahead of a 3.5% YoY rise recorded in the 2025 holiday season, Bain projects in its annual US retail holiday forecast.But Bain also tempers the upbeat view of the holiday outlook for retailers, noting that more than half of the nominal sales growth will come from higher inflation as this pushes up prices for consumers in malls, shops and online.In-store sales drive 70% of the holiday season, most new growth coming from nonstore salesThe strongest sales growth in the holiday period is expected to come from a further jump in online buying, Bain forecasts based on findings from its Consumer Lab's survey of more than 1,100 consumers. Today's analysis projects that nonstore retail sales will grow 9% YoY, accelerating compared with last year and generating 60% of overall sales growth, up from 50% last year.Alongside, growth in in-store sales is expected by Bain to remain in line with last year, at 2.5% YoY, with the strongest performance predicted to come from the clothing and accessories segment, as well as from health and personal care products. Consumers say they expect clothing (43%) to overtake groceries (37%) as their highest-spending category in the holiday season, with gift cards (named by 36% of respondents) coming a close third.Shoppers say they anticipate spending more this year, especially among men, higher income earners, and younger consumers. More online shoppers plan to start the coming season's holiday shopping experience on AI platforms such as Claude, Google Gemini and ChatGPT (24% this year, up from 17% in 2025), as well as on retail and brand websites (60%, up from 51% in 2025), where an additional 13% plan to use retailer AI agents.Headwinds weigh on shoppers, but tailwinds may support holiday sales growthWhile Bain forecasts most categories will post nominal sales growth this holiday season, inflation is expected to count for much of the increase. Sales in some retail categories will remain flat, including furniture and home furnishings, electronics and appliances, and food and beverage. General merchandise, clothing and accessories, and e-commerce are expected to see both price and unit growth.Underlying the headwinds faced by retailers are cautious consumers whose spending power is being weighed down by gasoline prices that remain stubbornly high, as well as the impact of tariffs, geopolitical uncertainty, labor market participation at a five-year low (despite a stable national unemployment rate of 4.1%), and lower personal savings rates twinned with increasing credit card delinquency above the 10-year average.Despite these pressures, several factors are expected by Bain to help support nominal sales growth, including higher tax refunds that are up $43 billion from last year, higher stock prices with a 23% increase of the S&P 500 index YoY buoying the outlook of upper-income households, and also plans by some retailers to pass on tariff refunds to shoppers in the form of cuts in prices."While US 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," said Aaron Cheris, partner at Bain & Company and global head of the firm's Retail practice. "The key for retailers is to make the most of the crucial holiday season by striking the right balance when it comes to price and promotions, and making the most of new AI capabilities to enhance the customer experience and get ahead of competitors."Four key tactics for winning retailers in this holiday season Bain's report maps out four key tactics that it recommends winning retailers should deploy to outperform during the forthcoming holiday shopping season: Get in the zone on price, as price sensitivity returns to the forefront of purchase decisions, and AI-enabled comparison makes gaps easier to spot Emphasize assortment that can't be cross-shopped or price-matched line for line Win the big shopping days: Black Friday, Cyber Monday, and October promotional events with around 90% of shoppers planning to spend in at least one major retail sale event this holiday season, through personalized promotions and can't-miss events Invest in the customer experience and use AI to bolster it, knowing that emotional stakes are high over the holidays and a bad experience travels into next yearThis is the first of a series of retail holiday updates from Bain & Company that will publish through January 2027.Media contactsTo arrange an interview or for any questions, please contact: Dan Pinkney (Boston) – Email: [email protected] Gary Duncan (London) – Email: [email protected] Ann Lee (Singapore) – Email: [email protected]

US holiday retail sales set to outpace last year's seasonal growth performance to exceed $1 trillion for the first time--Bain & Company forecasts

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