US holiday sales set for slowest growth since pandemic, Deloitte report forecasts

Deloitte forecasts U.S. holiday sales for November 2025-January 2026 to grow at their slowest pace since the pandemic, projecting a 2.9%-3.4% increase to $1.61-$1.62 trillion, down from 4.2% last year. This anticipated slowdown, driven by macroeconomic uncertainties and persistent inflation, signals a challenging consumer spending environment for retailers, with in-store sales growth notably decelerating.

Analysis

Deloitte projects a significant deceleration in U.S. holiday sales growth for the November 2025-January 2026 period, with an expected increase of just 2.9% to 3.4%. This represents the slowest pace since the pandemic and a notable slowdown from the 4.2% growth recorded in the prior year. The forecast, which translates to total sales of $1.61 to $1.62 trillion, is clouded by macroeconomic uncertainties and persistent inflation impacting consumer spending. The data reveals a clear divergence between sales channels: e-commerce is expected to maintain robust growth of 7-9%, consistent with last year, while in-store sales growth is projected to decelerate sharply to 2-2.2% from 3.4% a year ago. This challenging environment is reflected in mixed corporate guidance, with Walmart and Macy's raising forecasts while Target and Best Buy held steady, and toymaker Mattel issued a cut, indicating a bifurcated retail landscape where performance will likely vary significantly by company and category.

Key Decisions for Investors

• Given the overall forecast for slowing consumer spending and the moderately negative sentiment, investors should exercise caution on the retail sector and scrutinize companies with heavy reliance on brick-and-mortar sales, which are projected to see the sharpest deceleration.
• The conflicting corporate guidance suggests a stock-picker's market; consider overweighting retailers like Walmart (WMT) and Macy's (M) that have raised forecasts, while underweighting or monitoring those in discretionary categories with lowered outlooks, such as Mattel (MAT).
• Focus on retailers with strong, proven e-commerce and omnichannel capabilities, as the 7-9% projected online sales growth significantly outpaces the 2-2.2% growth expected from physical stores.
• Investors should analyze upcoming earnings reports for margin performance, as inflation is partially driving top-line revenue growth, potentially masking underlying weakness in sales volume.