US Retailers Face Slowest Holiday Sales Growth Since Pandemic

The upcoming holiday season is set to present significant challenges for U.S. retailers, as a recent forecast by the consultancy firm Deloitte indicates that holiday sales growth will be the lowest since the onset of the pandemic. From early November through the end of January, sales during the period of November 2025 to January 2026 are projected to increase between 2.9% and 3.4%. This marks a decline from the 4.2% growth observed during the same timeframe last year.

Deloitte’s findings, reported by Reuters, suggest that the anticipated slowdown in retail sales could complicate an already difficult environment for businesses grappling with rising operational costs and tariff impacts. The forecast draws on data from reputable sources, including the United States Commerce Department and the United States Bureau of Economic Analysis.

Sales Trends and E-commerce Outlook

While overall sales growth is expected to falter, Deloitte predicts that e-commerce sales will continue to thrive, with an expected increase between 7% and 9%. This projection aligns with the 8% growth recorded in the previous year. Conversely, in-store sales are forecast to rise by a modest 2% to 2.2%, down from 3.4% growth last year.

These projections raise concerns for retailers, as the combination of slow sales and higher costs could negatively impact their profitability. Many retailers have had to increase product prices due to tariffs, a move that could deter potential buyers.

Mixed Signals from Retailers

As the holiday season approaches, retailers are offering varied outlooks. Companies such as Target and Best Buy have maintained their annual projections, indicating confidence in their strategies. In contrast, Walmart and Macy’s have adjusted their forecasts upwards, suggesting a more optimistic view of their sales potential.

The performance of retail stocks also reflects these dynamics. The SPDR S&P Retail ETF (XRT), which encompasses a range of sectors including supermarkets, automotive, apparel, and restaurants, has seen an increase of 8.2% this year. This growth lags behind the 10.3% gains of the broader SPDR S&P 500 ETF (SPY). Investor sentiment surrounding these funds has remained mixed, with Stocktwits reporting a ‘neutral’ outlook for retail and a ‘bullish’ sentiment for the broader market.

As retailers prepare for what is traditionally a bustling shopping period, the implications of Deloitte’s forecast highlight the need for businesses to navigate a challenging landscape. Adjustments in pricing strategies, inventory management, and customer engagement will likely play crucial roles in how retailers fare this holiday season.