The National Retail Federation has forecast that retail sales in 2026 will grow by 4.4% over 2025 to $5.6 trillion, based on a newly enhanced forecasting approach developed in partnership with Oxford Economics, one of the world’s leading independent advisory firms. NRF made this announcement during its sixth annual State of Retail & the Consumer virtual event, which examines the health of American consumers and the retail industry.
“Consumer spending was a steady and reliable engine of growth in 2025, even as broader economic conditions fluctuated,” said NRF President and CEO Matthew Shay. “We expect that consumer resilience to continue into 2026, with household spending once again serving as a pillar of economic support.”
The 2026 sales forecast compares with 3.6% average annual sales growth over the last 10 years, excluding the pandemic period from 2020 to 2022 when growth was atypical. NRF noted that retail sales include both store-based and online purchases in a broad range of categories, including discount stores, grocers and specialty stores.
“Renewed tensions in the Middle East and the ripple effects across global markets are adding more uncertainty to the economic landscape,” NRF Chief Economist and Executive Director of Research Mark Matthew said. “While the geopolitical environment and ongoing trade policy challenges warrant close attention, we remain optimistic that the underlying fundamentals of the U.S. economy will support continued stability in the year ahead.”
Matthews added that the spending outlook is still bifurcated between higher- and lower-income consumers, with higher-income households driving the majority of growth in spending across a range of retail categories. Consumer activity is expected to receive a modest boost in the first half of the year from larger refunds associated with tax cuts enacted under the Working Families Tax Cut Act. Inflation is projected to remain elevated through midyear before easing by the third quarter, offering some relief to households as the year progresses.
Labor market conditions are expected to soften, with muted non-farm employment growth throughout much of the year. Even so, NRF reported that the unemployment rate is projected to remain below 4.5%.
Although consumer sentiment is not expected to improve significantly, NRF noted that sentiment has remained historically disconnected from actual spending patterns. Solid underlying fundamentals — particularly income growth, household balance sheets and labor market stability — are expected to support continued consumer activity this year.
NRF also noted that its forecasts assume that tariffs will remain close to current levels, albeit achieved through different means. Unprecedented higher tariffs or trade policy uncertainty could weigh on hiring and hit equity markets, weakening consumer spending.
NRF’s forecast is presented in nominal terms, and while inflation is expected to remain above the Federal Reserve’s target, goods inflation is likely to stay within a lower band. As a result, a meaningful portion of the projected sales growth is anticipated to reflect real gains rather than inflation-driven increases.
NRF’s forecast is based on its own definition of core retail sales, which excludes auto dealers, gas stations and restaurants.
