NRF: Retail sales to grow 4.4% in 2026; outlook tops average growth of past 10 years

Article originally posted on HERE on March 19, 2026

Consumer resilience is expected to continue in 2026, with higher-income households driving the majority of growth in retail spending.

That’s according to the National Retail Federation, which forecast that retail sales in 2026 will grow 4.4% over 2025 to $5.6 trillion. (NRF’s forecast is based on its own definition of core retail sales, which excludes auto dealers, gas stations and restaurants.)

NRF’s 2026 sales outlook compares with 3.6% average annual sales growth during the last 10 years (excluding the pandemic period from 2020 to 2022 when growth was atypical). The outlook is based on a newly enhanced forecasting approach developed in partnership with Oxford Economics.

NRF chief economist and executive director of research Mark Mathews cautioned that renewed tensions in the Middle East and the ripple effects across global markets are adding more uncertainty to the economic landscape.

“While the geopolitical environment and ongoing trade policy challenges warrant close attention, we remain optimistic that the underlying fundamentals of the U.S. economy will support continued stability in the year ahead,” he added.

Mathews added 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.

Consumer activity is expected to receive a modest boost in the first half of the year from larger refunds associated with tax cuts enacted under the Working Families Tax Cut Act. Inflation is projected to remain elevated through mid-year before easing by the third quarter, offering some relief to households as the year progresses.

Labor market conditions are expected to soften, with muted non‑farm employment growth throughout much of the year. Even so, the unemployment rate is projected to remain below 4.5%.

Although consumer sentiment is not expected to improve significantly, NRF noted that sentiment has remained historically disconnected from actual spending patterns. Solid underlying fundamentals, particularly income growth, household balance sheets and labor market stability, are expected to support continued consumer activity in 2026.

NRF’s forecast is presented in nominal terms, and while inflation is expected to remain above the Federal Reserve’s target, goods inflation is likely to stay within a lower band. As a result, a meaningful portion of the projected sales growth is anticipated to reflect real gains rather than inflation-driven increases.

The 2026 retail sales announcement was made during NRF’s sixth annual State of Retail & the Consumer virtual event, which examines the health of American consumers and the retail industry.