US Retail Growth to Be Slower Than Last Year, Bain Predicts

US retail sales are likely to grow slightly more slowly in the coming year than the previous one, according to a new report from Bain & Company.

The company expects sales to advance 3.5% to $5.3 trillion in 2026, it said Monday. This estimate is down from its previous prediction of 4% a year earlier.

Increased pressure on consumers and weakening confidence amid economic uncertainty, higher unemployment and slower labor supply growth are some of the key factors believed to lead to a slower rise. Shoppers lean toward lower prices and private-label goods, which could affect sales, Bain added.  However, reduced taxes and possible lower interest rates could boost shopper sentiment and spending.

“Consumers continue to face financial pressure, driving our forecast for slower retail sales growth in the US 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 (artificial intelligence) platforms. They must utilize AI in ways that expand the value-creation capability of the entire business.”

Bain predicts 2% growth in sales in the UK, while France will likely see a modest 1.5% gain. In Germany retail sales are projected to climb 2.5%, down from 3.6% estimated a year earlier. The European countries are experiencing the same economic uncertainty as the US.

Image: People shopping at a mall in San Jose, California. (Shutterstock)