Holiday Sales Forecast to Top $1 Trillion for the First Time, NRF Says

U.S. holiday spending is on track to cross $1 trillion for the first time, according to the National Retail Federation. The trade group forecasts that sales in November and December 2026 will grow 4.2% from a year earlier to $1.013 trillion, a faster pace than last season’s 3.1% gain. The forecast, released October 15, comes with a caveat that matters for small sellers: roughly half of that growth is expected to come from higher prices rather than shoppers buying more.

What happened

• The headline number. NRF projects holiday sales of $1.013 trillion for November 1 through December 31, up 4.2% from 2025. Last year, holiday sales rose 3.1% to $972 billion. NRF’s figure excludes auto dealers, gas stations and restaurants.
• Inflation is doing part of the work. NRF chief economist Mark Mathews said that nearly half of the projected gain reflects price increases, according to coverage by Chain Store Age and Retail TouchPoints. NRF expects core goods inflation to average 2.5% in 2026, up from 1.6% in 2025.
• Hiring stays cautious. Retailers are expected to add 325,000 to 375,000 seasonal workers, in line with the roughly 356,000 seasonal jobs filled last year. NRF pointed to persistent inflation, higher gas prices, higher interest rates and elevated consumer debt as reasons for the caution.
• Not every household is in the same position. Mathews said that inflation and pressure on household budgets “will affect consumers differently across income groups.”
• Recent spending data backs up the resilience. The Census Bureau reported that retail and food services sales reached $745.0 billion in September, up 0.8% from August, following a revised 1.3% increase the month before.

NRF also stopped drawing a hard line between online and in-store sales in its outlook, noting that shoppers move between channels and companies count those sales differently.

Why it matters for small businesses

• Demand should be there, but it may be more price-sensitive. If about half of the growth is inflation, the number of items sold may rise only modestly. Shoppers stretched by higher gas and borrowing costs are likely to compare prices and wait for deals.
• Your costs are probably rising too. Higher goods inflation affects materials, packaging and shipping supplies. Selling more at last year’s prices can still mean lower profit.
• Inventory is a cash flow bet. Ordering too much ties up cash as interest rates rise; ordering too little means missed sales during the busiest weeks of the year.
• Big retailers are competing hard on value. NRF CEO Matthew Shay said retailers are ready to meet demand with “competitive prices, value and choices for every budget,” which raises the bar for small shops on offers and gift-ready options.

What you can do now

1. Recheck your prices against current costs before your holiday promotions go live, and build any discount on top of a healthy margin. Our guide on how to price handmade products for profit walks through the math.
2. Plan inventory from your own data. Look at what sold last November and December, add a modest buffer for best sellers, and avoid deep bets on slow movers. See how to track inventory for an Etsy shop in a spreadsheet.
3. Offer options at several price points, such as a lower-priced gift item or bundle, for shoppers on tighter budgets.
4. Set shipping cutoffs and processing times early so last-minute buyers know exactly when to order.
5. Keep a cash cushion for January, when sales typically slow and card bills from holiday purchases come due.

This brief is for general information only and is not financial advice.