NEW YORK — Holiday retail sales in the United States are expected to increase 4% year-over-year (YoY) in November and December, reaching more than $975 billion, according to Bain & Company’s annual holiday outlook. While healthy, the growth forecast falls short of the 10-year average of 5.2%, underscoring a season of mixed signals as consumers juggle financial pressures with rising wages and stock market gains.
More in-store shopping, slower e-commerce growth
Bain’s consumer survey points to renewed strength for brick-and-mortar retail. In-store sales are projected to climb 2.75% YoY, contributing 2% of overall growth, with clothing and accessories, general merchandise (excluding department stores), and health and personal care categories each forecast to grow 5% or more.
E-commerce and other nonstore channels remain critical, expected to generate half of the overall holiday sales growth. However, their expansion has slowed, with 7% growth forecast compared with 9% to 10% in the past two holiday seasons.
Consumer headwinds and tailwinds
Bain’s proprietary Consumer Health Index shows households are under pressure. Severe credit delinquencies of 90 or more days rose 3% year over year in August, the highest level since 2011, with younger borrowers particularly affected. Savings rates remain low, and labor force participation has fallen for four consecutive months.
At the same time, several positive forces could bolster holiday spending. Wages increased 3.7% YoY in August, outpacing inflation and the Consumer Price Index, which rose 3.1%. Stock market gains, with the S&P 500 up 21% from last year, may improve wealth perceptions among higher-income households. The potential for interest rate cuts could also provide a late-season lift.
Retailers urged to lean into value and events
“This holiday season will be a mixed one for U.S. retailers,” said Aaron Cheris, partner in Bain’s Retail practice. “Consumers are cautious and facing financial pressure, but they are also feeling the lift from higher wages and a strong stock market. Leading retailers will strike the right balance — leaning into value, creating warm human experiences while implementing new technologies, and capitalizing on big events like Black Friday to capture share from competitors.””
Bain identified four strategies for outperforming this season:
- Go big on major shopping events, with 10% more consumers planning to shop on Black Friday and Cyber Monday.
- Lead with sharp Key Value Items (KVI) pricing, as 55% of shoppers say high prices will affect their holiday budgets.
- Keep experiences warmly human, even as AI tools support frontline staff.
- Deploy timely, personalized ads, as 30% more consumers are open to sponsored advertising this year.
This report is the first in a series of holiday retail updates Bain will publish through January 2026.
