NRF Forecasts 4.4% Annual Retail Sales Growth

In 2025, consumer spending was steady and a "reliable engine of growth," said NRF CEO Matthew Shay, in a statement. And therefore, "we expect that consumer resilience to continue into 2026, with household spending once again serving as a pillar of economic support.”

NRF said retail sales in 2026 will grow by 4.4% over 2025 to $5.6 trillion.

This is based on a newly enhanced forecasting approach developed in partnership with Oxford Economics.

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.

“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 Mathews said in a statement. “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.”

Mathews 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, the unemployment rate is projected to remain below 4.5%.

Although consumer sentiment is not expected to improve significantly, NRF notes 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 in 2026.