Retail sales growth is expected to slow across the US, UK and major European economies in 2026 as consumers continue to feel financial pressure and discretionary spending remains subdued, according to new forecasts from Bain & Company.
In its 2026 Global Retail Sales Outlook, Bain said macroeconomic uncertainty, cost-of-living pressures and cautious shopper behaviour would weigh on growth in the year ahead, even as inflation eases in most markets.
“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. He added that retailers would need to sharpen their value propositions and deploy artificial intelligence in ways that genuinely enhance customer value, rather than simply cutting costs.
Bain forecasts US retail sales growth of 3.5 per cent year on year in 2026, taking the market to $5.3 trillion. That represents a slowdown from estimated growth of 4.0 per cent in 2025, with underlying volume gains expected to remain modest as inflation hovers between 2.6 per cent and 3.0 per cent.
The consultancy said mounting consumer strain, rising unemployment and slowing labour supply growth were eroding confidence. Its Consumer Health Index shows sentiment among higher-income households, which account for more than half of US retail spending, declined in January 2026.
Support authors and subscribe to content
This is premium stuff. Subscribe to read the entire article.
