U.S. retail sales are expected to grow 3.5% year over year in 2026 to $5.3 trillion, down slightly from an estimated 4.0% increase in 2025, according to Bain & Company’s 2026 Global Retail Sales Outlook.
Bain expects volume growth to remain modest, with inflation hovering between 2.6% and 3.0%.
The firm cited mounting consumer strain and weakening confidence, driven by economic uncertainty, rising unemployment and slower labor force growth.
Sentiment among higher-income U.S. households, which account for more than half of consumer spending, declined in January 2026, based on Bain’s Consumer Health Index.
As shoppers increasingly trade down and shift toward private label and lower-priced goods, a “flight to value” could cap nominal sales growth.
However, Bain said lower taxes, easing fuel prices and the potential for interest rate cuts could support consumer confidence and help sustain spending.
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In the U.K., retail sales are forecast to grow 2% in 2026, with inflation stabilizing around 2.5%.
Food volumes are expected to be flat, while non-food volumes may slip slightly as cost-of-living pressures, high mortgage rates and a softening labor market weigh on discretionary demand.
Germany’s retail sales are projected to rise 2.5% in 2026, down from 3.6% in 2025.
While inflation is expected to remain near 2.2%, fragile consumer confidence, rising unemployment and heavy discounting, particularly in grocery, are likely to limit upside, despite wage growth outpacing inflation.
France is expected to see near-flat retail sales growth of 1.5% in 2026, compared with an estimated 1.7% in 2025.
Inflation is forecast to normalize between 1.3% and 1.7%, with elevated savings and lower household debt helping offset pressures from rising unemployment and high mortgage rates.
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