An economic outlook released Monday by the consulting firm Bain and Co. forecasts that retail sales growth will slow in 2026 in the U.S., UK, France, and Germany.By the numbers, Bain projects U.S. retail sales to grow 3.5% year over year in 2026, to $5.3 trillion, slightly down from estimated 4.0% growth in 2025.Three factors driving that trend include: mounting consumer strain and waning consumer confidence amid economic uncertainty, rising unemployment, and slowing labor supply growth. Those negative variables would outweigh more buoyant scenarios such as reduced taxes, declining fuel prices, and potential interest rate cuts, according to Bain’s report, titled “2026 Global Retail Sales Outlook.”The prediction is underpinned by Bain’s data finding that sentiment among higher-income U.S. households, who account for more than half of spending, declined in January 2026. As shoppers increasingly gravitate toward lower-priced and private-label goods, a “flight to value” could temper nominal sales growth.Similar scenes are predicted to play out in Europe, with 2026 retail sales growth forecasts of 2% for the UK, 1.5% for France, and 2.5% for Germany.”Consumers continue to face financial pressure, driving our forecast for slower retail sales growth in the US and Europe in 2026,” Aaron Cheris, global head of Bain’s Retail practice, said in a release. “This year’s industry leaders will need to sharpen their customer value propositions, giving shoppers compelling reasons to choose them over competitors and AI platforms. They must utilize AI in ways that expand the value-creation capability of the entire business.”
