#USA #Boston #Bain & Company #Consumer Trends #Retail Sales

Retail Sales Growth Forecast for 2026

Bain & Company recently released its Global Retail Sales Outlook for 2026, projecting a slowdown in retail sales growth in several key markets including the United States, United Kingdom, France, and Germany. This analysis draws on various macroeconomic factors and changing shopper behaviors that suggest a more challenging sales landscape ahead.

United States Retail Sales

In the US, Bain forecasts retail sales to grow by 3.5% year over year, reaching approximately $5.3 trillion in 2026. This represents a decrease from the estimated 4.0% growth in 2025. Modest volume gains are expected, amid inflation rates projected to be in the range of 2.6% to 3.0%. According to Aaron Cheris, global head of Bain’s Retail practice, consumers are facing mounting financial pressures, which will likely influence their purchasing decisions significantly.

The Consumer Health Index reveals a drop in sentiment among high-income US households, who contribute to over half of the national spending, indicating that a “flight to value” will occur, with customers tending to choose lower-priced and private-label goods. Nonetheless, factors like reduced taxes, declining fuel prices, and possible reductions in interest rates could provide a slight boost to consumer confidence.

United Kingdom Insights

For the UK market, Bain anticipates a growth rate of 2% in retail sales for 2026. Here, inflation is expected to stabilize around 2.5%, with flat volume growth in food sales and a slight decline in non-food categories. Persistent cost-of-living pressures, coupled with high mortgage rates and a softening labor market, continue to shape consumer sentiment negatively. The discretionary spending environment remains subdued, as many shoppers focus on value, seeking discounts and trading down to less expensive options. Recent interest rate cuts could offer minimal relief but are unlikely to make a significant impact on disposable income until 2027.

Retail Trends in France

Retail sales in France are projected to hover close to flat growth, with an expected increase of 1.5% in 2026 compared to an estimated 1.7% growth in 2025. While sales volumes are not expected to change significantly, inflation is predicted to normalize between 1.3% and 1.7%. Rising unemployment and high mortgage rates are putting pressure on household finances; however, consumers' elevated savings and decreased debt-to-income ratios are cushioning their budgets, contributing to slight sales growth.

Germany's Retail Landscape

In Germany, Bain projects retail growth at 2.5% in 2026, down from 3.6% in 2025. The inflation rate is forecast to remain around 2.2%, fostering moderate volume growth. However, consumer confidence continues to be fragile as households prioritize savings over spending, amidst rising unemployment rates. Discounting tactics, especially in grocery sections, may further restrict nominal sales increases. On the bright side, wage growth is surpassing inflation, and enhanced spending by the government on infrastructure and defense could positively influence future sales.

Conclusion

In summary, Bain & Company’s 2026 retail sales growth outlook paints a cautious picture for some of the largest economies in the world. Challenges such as economic uncertainty, inflation, and consumer confidence are expected to play key roles in determining how retail markets perform in the coming years. Retailers will need to adapt to these changes by refining their value propositions and integrating innovative solutions, such as AI, within their business models to remain competitive. The ability to engage and retain customers in a demanding marketplace will be paramount for success in 2026 and beyond.