Global consulting firm AlixPartners has released its 2026 U.S. Retail Holiday Outlook, which forecasts 4 percent to 7 percent growth in Holiday retail sales this coming season as consumers continue to spend despite growing economic concerns.
The study, which was conducted weeks before Wednesday’s unanimous decision by the Federal Open Market Committee to raise interest rates by a quarter of a percentage point to a range of 3.75 percent to 4.00 percent, revealed that 57 percent of consumers say the economy is worse than it was 12 months ago – up six percentage points from last year – and 37 percent intend to spend less this Holiday season, which is up 2 points from last year’s study.
Still, AlixPartners pointed out that actual spending has averaged ~5 percent above prior-year levels each month throughout 2026, according to U.S. Census data.
In the report release, AlixPartners said that this year’s study indicated that consumers, rather than pulling back altogether, are changing how and when they shop, including “buying fewer units, trading down to lower-cost brands and retailers, making smaller and more frequent purchases, shopping earlier to maximize promotions, and relying more heavily on credit cards and buy now, pay later (BNPL).”
The AlixPartners research, drawn from more than 15,000 U.S. consumers surveyed throughout 2026, identified seven ways shoppers are stretching their budgets while continuing to spend.
“Across the industry, retailers are wondering when consumers will stop showing up given the declining sentiment trajectory we’ve been seeing for the last few years,” said Bryan Eshelman, Americas Lead of Retail, AlixPartners. “While most of our clients have seen noticeable declines in traffic as new disruptions hit the consumer, time and time again they show back up. Our data is showing us that they are finding more and more creative ways to continue spending.”
Other Key Findings:
Consumers are trading down selectively, not across the board.
Shoppers are shifting from premium to private-label or mid-tier brands only where they believe quality holds up. Even high-income households are moving in this direction, spending over 50 percent more on private label than in 2019.
Shoppers are migrating to value retailers.
Analysis of Placer.AI data showed a 5 percent year-over-year increase in store trips to value players, compared to a 9 percent decrease in trips to full-price apparel stores.
Consumers are buying fewer, higher-quality items.
Even as shoppers trade down in certain categories, quality remains a top consideration, particularly in fashion. 39 percent of consumers would rather stick with brands they love and buy fewer units. Comfort (41 percent) and durability (39 percent) are now driving premium spend more than novelty features.
Consumers are shopping in smaller, more frequent baskets.
Particularly in grocery, trip frequency is on the rise. The report found 36 percent of consumers are shopping at least weekly, increasing to 57 percent among households with children. The shift is being driven by younger consumers and low- and middle-income households who are making needs-based trips instead of large stock-ups.
Holiday shopping is beginning earlier.
AlixPartners said 47 percent of consumers plan to start shopping before Halloween, compared to 43 percent last year – and 15 percent were already shopping in August. In 2023, the percentage shopping before Halloween was just 38 percent.
Shoppers are leaning on BNPL and credit.
Credit card balances hit $1.26 trillion in the second quarter of 2026, up 5.9 percent year-over-year and outpacing sales growth, according to LendingTree. The percentage of consumers using BNPL to defer payment increased to 37 percent, with the number rising to nearly 60 percent among Gen Z shoppers.
“Consumers are not cutting back evenly across every category. They are becoming more selective about self-gifting and looking for ways to preserve quality while staying within their budgets,” said Sonia Lapinsky, Leader of Fashion Retail, AlixPartners. “Retailers will need to clearly communicate value, respond to an earlier and longer shopping season, and ensure shoppers can find the products they want across channels. Understanding these trade-offs will be critical to capturing consumer spending this holiday season.”
Jeremy Lambert, Partner & Managing Director in AlixPartners’ Retail Practice, added part of the reason that stress on credit and rising delinquencies hasn’t taken more of a bite out of overall spending reflects the ongoing ‘k-shape’ in the economy right now.
“Higher income households, with relatively healthy balance sheets, now represent a higher share of overall spend than before,” he suggested. “Americans living paycheck-to-paycheck – working class and younger adults – are really feeling the effects of too much easy credit, and those retailers that rely on customers of more modest means are certainly feeling it.”
Methodology
The findings are drawn from AlixPartners’ 2026 annual consumer research, which surveyed more than 15,000 U.S. consumers so far this year across grocery, footwear, apparel, home delivery, hospitality, travel, leisure, restaurants and general retail, supplemented by third-party data.
