This is going to be another good year for retailers—or so says the National Retail Federation (NRF), which forecasts that retail sales will grow this year to $5.6 trillion, an increase of 4.4% over 2025.
The forecast was issued during NRF’s annual virtual event—the State of Retail & the Consumer.
NRF President and CEO Matthew Shay says, “Consumer spending was a steady and reliable engine of growth in 2025, even as broader economic conditions fluctuated. We expect that consumer resilience to continue into 2026, with household spending once again serving as a pillar of economic support.”
But, although remaining “optimistic,” NRF Chief Economist and Executive Director of Research Mark Mathews cautions that, “Renewed tensions in the Middle East and the ripple effects across global markets are adding more uncertainty to the economic landscape.”
This positive outlook follows a successful holiday sales season.
A Cautionary Note
But Deloitte’s 2026 Retail Industry Global Outlook takes a more cautious approach. It says, “The U.S. economy faces headwinds from trade and immigration policy. Tariffs will likely boost inflation in 2026, thereby reducing consumer purchasing power.
“Immigration policy could mean slower employment growth and labor shortages in key industries. Meanwhile, low- and middle-income households face increasing financial stress.”
Deloitte’s Outlook says that due to a continued “AI-related investment economic growth will likely be moderate. If the pace of AI-related investment continues, economic growth will likely be moderate. Yet if there is a reversal in AI investments, the U.S. economy could weaken substantially.”
And NRF’s Mathews notes 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.”
Ben Johnston, COO of Kapitus, a small business lender, is worried that “Rising oil prices hit consumers directly by increasing non-discretionary spending, such as the cost of driving to work and heating one’s home. As a result, consumers cut back on the discretionary spending that small businesses rely on, thereby reducing cash flow and financial health.”
Online Sales
The NRF now combines online and in-store sales for its forecast. But in Chain Store Age (CSA), Dan Berthiaume writes that the U.S. boasts the world’s second-highest e-commerce sales, reaching $1.38 trillion in revenues last year. Global e-commerce sales hit $6.8 trillion, with China leading the way with revenues of $3.45 trillion.
Capital One Shopping says 2026 U.S. retail e-commerce sales are expected to hit $1.62 trillion, up 10.4% from 2025. (The predictions from different sources tend to vary.)
Opportunity for Growth
The good news, says Berthiaume, is that e-commerce penetration in the U.S. is only at 16%, indicating there’s plenty of opportunity for retailers to grow their online sales.
The CSA article says there’s “significant room for growth, particularly in categories like grocery and business-to-business that have been slower to move online.”
According to Joe Derochowski, Circana home industry advisor, the retail categories expected to see growth this year, in both online and in-store sales, include:
- Essentials:food and beverages
- Clothing:outerwear, bottoms
- Leisure:arts & crafts, building sets, exploratory, outdoor toys
- Health & Wellness:performance footwear, cardio machines, weights, yoga, beauty
- Social-Inspired:fragrances, hair products, makeup.
2026 Outlook
While the outlook for retail remains positive, it’s clear that growth won’t be evenly distributed—and uncertainty isn’t going away. For small business retailers, the opportunity is real, particularly in e-commerce and high-demand categories, but so are the challenges. Navigating shifting consumer behavior, rising costs, and an uneven economic landscape will require both flexibility and focus in the months ahead.
Rieva Lesonsky is the founder of Small Business Currents, a content company focusing on small businesses and entrepreneurship. You can find her on Twitter @Rieva, Bluesky @Rieva.bsky.social, and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
Photo courtesy Getty Images for Unsplash+
