What Will Holiday Spending Look Like This Year, Given Observable Trends?
In a detailed breakdown of the Sept. 1 Coresight Research data presented by The Shelby Report’s Treva Bennett, the question of what the remaining portion of 2026 – particularly the all-important holiday season – might look like was examined.
In broadest terms, Coresight anticipated that total U.S. retail sales growth would be registered at 4.4% YoY for Q4, “setting up a holiday season the firm expects to be defined by lean inventories, less discounting and higher-income households driving spending,” per Bennett.
Bennett then pivoted to highlight the grocery segment as one which may actually be subject to higher price competition and discounting as compared to the broader retail business, citing Coresight analyst Sujeet Naik on the subject.
“Grocery is already a highly price-competitive category, and with food inflation, higher fuel costs and SNAP cuts putting more pressure on household budgets, shoppers are likely to be even more focused on value heading into the holidays,” Naik stated.
“Grocers can lean more on private label, loyalty programs and sharp pricing on key, high-visibility holiday items. They should also keep some flexibility to step up promotions closer to Thanksgiving and Christmas if demand turns out to be softer than expected,” he added.
Other notable data points pulled from the report:
Holiday 2026 growth could beat last year’s figure: The projected 4.4% YoY growth figure would outpace last year’s holiday statistic, but would also be roughly aligned with the growth metrics record the three years prior. However, inflation has been an outsized influence on that figure.
The first half of 2026 created retailer momentum: Larger-than-previous tax refunds (up 18.1% on the whole) drove strong retail sales, with about one-third of said refunds being spent in the retail business. A 7.9% sales growth figure recorded in June was laid at the feet of Amazon Prime Day and competing sales, such as Walmart Deals.
Units are lean, and inventory issues may result: Tariffs are bolstering inventory values to potentially obscure lean unit counts and potential inventory issues. “Should scarcity confront strong demand, the firm expects less discounting, higher product prices and earlier shopping – a combination that would support retail inflation in holiday categories and, in turn, nominal holiday sales growth,” Bennett noted.
SNAP changes could hurt: Lower-income households could produce lower traffic and basket sizes to grocery retailers due to SNAP changes, and price sensitivity could be further heightened as well. Conventional supermarkets and warehouse clubs are anticipated to weather the changes better than convenience stores, dollar stores, and independent grocers, who hold greater exposure to beverages, confectionery, etc.
Consumer sentiment was also discussed, with the K-shaped economy once more being signaled as a reality – middle-income and lower-income households being much less likely to signal intent to spend more than higher-income households. However, “Coresight noted sentiment and spending diverged over that stretch, with retail sales growth holding solid even as broader sentiment slumped alongside rising gasoline prices,” according to Bennett.
The analysis also showcased several different factors which could heavily influence the U.S. holiday spend this year, including the Sept. 30 budget deadline, Nov. 3 midterm elections, hiking electricity rates, continuing pressure on gas prices, persistent inflationary pressure, and more. Particularly concerning powers retailers and their supply chains could exert, “Coresight recommended scenario-based pricing and inventory plans, securing fill-in capacity with vendors up front and staying ready to compete on price in October, when major sales events such as Prime Big Deal Days take place.”