The global retail landscape is entering 2026 with resilience and recalibration. According to the National Retail Federation (NRF), U.S. retail sales are projected to grow 4.4% this year, reaching $5.6 trillion. The forecast, developed in partnership with Oxford Economics, positions 2026 as a stronger-than-average year, exceeding the 3.6% average annual sales growth over the past 10 years. NRF also stated it did not factor “ongoing tensions” in the Middle East into such figures, and factored in tariffs indirectly.
To bring the findings to life, NRF gathered executives from leading retail brands, top industry analysts and consumer experts for a three-part, live industry 2026 State of Retail & the Consumer webinar. Panelists revealed an industry navigating shifts in consumer behavior, sourcing strategies and technology adoption.
Consumer spending optimistic yet bifurcated
“Consumer spending was a steady and reliable engine of growth in 2025, even as broader economic conditions fluctuated,” NRF president and CEO Matthew Shay said. “We expect that consumer resilience to continue into 2026, with household spending once again serving as a pillar of economic support.”
However, the consumer story is increasingly bifurcated.
NRF chief economist and executive director of research Mark Mathews underscored the persistence of a “K-shaped” dynamic, where higher-income households drive a disproportionate share of retail growth. This divergence is particularly relevant for discretionary categories like fashion, where premium positioning continues to outperform.
At the same time, lower- and middle-income consumers remain under pressure, reinforcing the importance of value-led propositions. Crucially, value is no longer defined solely by price—it increasingly includes brand experience, product relevance and convenience.
A notable dynamic heading into 2026 is the ongoing disconnect between consumer sentiment and actual spending behavior. While confidence levels remain subdued, spending continues—particularly in categories tied to self-expression, lifestyle and emotional engagement. This paradox has become a defining feature of the post-pandemic consumer environment.
“And while we do expect inflation to remain above the Fed’s target for the year, we also expect goods inflation will remain in a slightly lower band, meaning that a significant proportion of NRF’s forecasted growth will actually be real growth and not just an inflation induced rise in spending,” said Mathews, adding they continue to expect a weaker labor market, with non-farm employment remaining muted for much of the year.
“Now, despite this, we do not anticipate a significant impact on the unemployment rate, which should remain below 4.5%. The disconnect between GDP and the labor market should remain pronounced throughout the year,” he said.
Global Sourcing Enters a New Phase
For fashion and retail executives, one of the most consequential shifts lies in the evolution of global supply chains.
Broadcasting from the Port of Los Angeles, which handles 10 million containers a year, NRF’s Matt Shay sat down with Port of LA executive director Gene Seroka and BJ Wholesale Club’s CEO Bob Eddy to discuss the continued rebalancing of sourcing strategies.
China’s share of imports through the port has declined from approximately 60% in 2018 to around 40% today, said Shay, with increasing volume coming from Southeast Asia, including Vietnam, Indonesia and Malaysia. This diversification reflects both geopolitical realities and strategic risk mitigation. Nearshoring, meanwhile, is gaining traction, as suppliers in Canada and Mexico offer shorter lead times and greater supply chain agility.
BJ’s sourcing reflects this shift. “Maybe about 5% of our goods come from China, and many other countries along the way, probably our biggest trading partners are actually Canada and Mexico at this point,” said Eddy.
Technology as Baseline
AI, automation, and advanced analytics are increasingly important to operations, from predictive port logistics to robotics-enabled fulfillment.
“What’s really changing now are the technology-based jobs,” said Eddy, emphasizing that they augment rather than replace the workforce. “So the more data analytics and robotics that come into the supply chain, folks are increasingly getting technical with what they do to make sure that we bring the right product to the right place at the right time and right price.”
Soroka outlined three tech innovations at the Port of LA: the Port Optimizer for daily performance insights, AI-driven digital twinning and geospatial mapping for infrastructure and disruption management, and robotics/automation that support workforce growth. “Even with automation, longshore jobs have grown 21%,” Soroka said, adding they’re building the nation’s first goods movement training campus to “upskill workers and prepare for tomorrow.”
Gen Z and ‘Moments of Joy’
On the consumer side, Gen Z has emerged as highly influential, making them a crucial demographic to understand. While highly engaged, they are also very selective—actively seeking purchases that bring them “moments of joy.”
Rather than large, infrequent purchases, Gen Z is driving demand through smaller, more frequent transactions, often tied to emotional reward. Such treat culture in fashion translates to accessories, trend-driven trinkets and low-commitment purchases.
“Gen Z is exhausted and the future is uncertain, and the idea of this five-year plan no longer exists, so their time horizon is more over a one-to-two year period,” said Rachel Hardy, director of consumer product marketing at Pinterest. “And so they’re really seeking comfort, nostalgia and sort of indulgences in those small moments to take care of them. So I’d say a lot of self care, simple pleasures and comfort. They’re seeking little moments of joy.”
Gen Z is also leading the adoption of AI in shopping, with 60% of this demographic excited to use it or already using it. Despite the advantages to discover, compare and curate products, Gen Z also remains wary about transparency of AI-generated content. As Gen Z tends to “think in pictures,” Pinterest recently launched a “visual-first, Pinterest assistant conversational tool that helps users make decisions and purchases,” said Hardy.
Despite their wariness, 77% of Gen Z reports that AI has a “more positive impact on the world than negative,” according to MaryLeigh Bliss, chief content officer, YPulse. They just need to remain vigilant about misinformation. In fact, 78% of Gen Z consumers, according to YPulse data, want labels on posts on social media that are created with AI.
Brands should also note that Gen Z is looking for badges of authenticity. “We see a lot of brands leaning into this ‘made by human’ labels or really kind of positioning themselves as ‘anti AI’ in marketing or models, and that’s certainly one way to go,” said Bliss.
And while youth culture has always been tied to identity and community, today’s connected world of social media plays a heightened role around aesthetics, subcultures and digital self-expression. Such context erodes fashion’s traditional seasonal models in favor of a more fluid, real-time approach to faster trend adoption.
Experiences and ‘Treat Culture’
Wrapping up the panels, Joshua Friedlander, vice president of research, U.S. Travel Association, and Chad Moutray, Ph.D., CBE, senior vice president, industry research and knowledge and chief economist of the National Restaurant Association, talked about how experiences that deliver emotional value continue to drive consumers.
“Leisure travel in the United States is an over $800 billion industry, and a huge part of that actually goes specifically to retail, and a lot of that to small businesses,” said Friedlander. “And about $115 billion a year is spent on shopping from travelers in the United States.”
The theme of Gen Z’s moments of joy and treat culture extends to dining as well, as people-–of all demographics—seek out new experiences. “There’s a lot of tailwinds in the economy, and we expect people to go out to eat to celebrate those vacations,” said Moutray.
Despite the positives, NRF’s Mathews did acknowledge in a later announcement that the industry can’t overlook “renewed tensions in the Middle East and the ripple effects across global markets [which add] more uncertainty to the economic landscape.”
Nevertheless, he remains sanguine.
“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.”
