The National Retail Federation forecast that retail sales in 2026 will grow 4.4% over 2025 to reach $5.6 trillion, exceeding the 3.6% average annual sales growth over the past 10 years excluding the pandemic period. The forecast, developed in partnership with Oxford Economics, notes that higher-income households will drive the majority of spending growth across retail categories, with consumer activity receiving a modest boost from tax refunds associated with the Working Families Tax Cut Act.  Although consumer sentiment is not expected to improve significantly and remains historically low, NRF emphasizes that sentiment has remained disconnected from actual spending patterns, with solid fundamentals including income growth, household balance sheets, and labor market stability expected to support consumer activity. While the forecast presents a stronger outlook than most recent projections, renewed tensions in the Middle East and trade policy challenges add uncertainty, though these geopolitical events were not factored into the current forecast and could trigger a revision if circumstances dictate. 

Multiple major retailers report that shrink levels have declined significantly and are returning to pre-pandemic levels, with industry experts calling it "a nonevent" compared to recent years. Target's shrink returned to pre-pandemic levels in early 2026, down from expectations that shrink would reduce 2022 profits by $600 million, with executives attributing improvements to team efforts and industry collaboration against retail theft. Loss prevention experts suggest the improvement stems primarily from inventory predictability and supply chain stability rather than dramatic drops in shoplifting, as the pandemic-era supply chain disruptions that caused excess inventory in 2022 have now stabilized. Industry consultant Brand Elverston estimates that shrink losses are likely split evenly between theft and operational breakdowns such as inventory management errors, challenging the long-held narrative that theft accounts for nearly 70% of losses. 

Plus-size apparel retailer Torrid plans to close up to 30 additional stores by the end of the first half of fiscal 2026, completing a store optimization program that saw 151 locations close in fiscal 2025. The company achieved $18.5 million in operating expense reductions from the 2025 closures and minimized exit costs by structuring closures around natural lease expirations, with customer retention rates from closed locations performing consistently with historical levels. Torrid delivered $1 billion in fiscal 2025 net sales and $63.6 million in adjusted EBITDA, exceeding expectations, while launching five sub-brands that generated approximately $70 million in sales. For fiscal 2026, the company projects net sales of $940 million to $960 million and adjusted EBITDA of $65 million to $75 million, representing up to 140 basis points of margin expansion as it focuses on customer acquisition and digital growth. 

Arts and crafts retailer Michaels announced it is cutting prices on more than 3,000 items as consumers remain price-conscious and economically uncertain. The price reductions average 10% lower than original prices and span categories including arts and crafts, party goods, sewing supplies, home décor, and DIY materials, representing the final phase of a value-driven initiative rolled out over recent months. In October, Michaels also reduced the price of in-store birthday parties by 50% and lowered prices on over 200 party products by between 25-70%. The company is attempting to attract budget-conscious shoppers and capture customers from former competitors like Party City and Joann while economic pressures including rising gas prices and global uncertainty raise concerns about weakening consumer spending.

The home furnishings and furniture sector continues to struggle in 2026 with year-over-year sales declines, representing the only retail category tracked to see negative growth in January 2026 according to Commerce Department data. The sector's challenges stem from a sluggish housing market driven by lack of inventory and elevated interest rates, paired with weakened consumer confidence and changing tariff policies that have reduced discretionary spending on high-ticket home purchases.  Industry experts predict more bankruptcies in 2026 following 2025 filings by At Home and American Signature Inc., with financial health assessments showing multiple home retailers at high risk. Consumers are holding onto their money as the market remains stuck at a plateau, with analysts suggesting significant economic movement will be needed to restart growth in the home sector. 

All shopping center formats experienced year-over-year visit growth in February 2026, with open-air centers leading at 7.3% growth, followed closely by outlet malls at 7.2% after posting only 3.5% growth in January 2026. During peak shopping hours between 11 AM and 8 PM, outlet malls led all formats in year-over-year visit growth across every daypart, with particularly strong evening gains signaling a shift toward experiential and social visits rather than purely transactional shopping. The outlet mall resurgence follows a period of weakness attributed to competition from off-price retailers and resale channels, but centers are now differentiating themselves by expanding dining and experiential offerings to encourage longer visits. Indoor malls, which had led traffic gains throughout 2025, saw more moderate growth in February.

U.S. movie theater visits fell by at least 10% year-over-year in 2025 when comparing second and third quarter data from 2024 with the same periods in 2025, according to location intelligence provider Kalibrate. Major cinema chains experienced steeper declines with average visit volumes down approximately 15%, including Regal Cinemas declining 12.2% and Century Theatres dropping 20.3%, while independent theaters showed greater resilience with only an 8.6% decrease. Households earning over $100,000 annually showed signs of pulling back more than other income groups, notable since moviegoing has historically skewed toward those with more disposable income. Highly urbanized areas experienced the largest year-over-year declines with visits down 18%, while rural and exurban areas saw a much smaller decline of just 5%, and several Western states including Idaho, New Mexico, Utah and Wyoming posted increases of more than 5%.

Major retail brands have closed stores across Middle Eastern shopping hubs including Dubai as escalating regional conflict disrupts business operations and travel, with many locations operating with skeleton staff or shuttered entirely.  Chalhoub Group, operating 900 stores for brands including Versace, Jimmy Choo, and Sephora, closed all Bahrain locations while making staff attendance voluntary in UAE, Saudi Arabia, and Jordan markets. Luxury conglomerate Kering temporarily closed stores in UAE, Kuwait, Bahrain, and Qatar, while Amazon shuttered Abu Dhabi fulfillment operations and suspended regional deliveries. Apple's Dubai stores remained closed, H&M shut Bahrain and Israel locations, and consumer goods group Reckitt closed its Bahrain manufacturing site while instructing all Middle East employees to work from home. Luxury stocks LVMH, Hermès, and Richemont declined 4% to 6.5% as investors assessed the impact on a region that represented luxury's strongest growth market in recent years, accounting for 5% to 10% of global luxury spending.