Retail CEOs See Holiday Paradox: Anxious Shoppers Still Spending

U.S. holiday sales will rise 4% to 7% this season even though 57% of Americans say they are worse off than a year ago, according to consulting firm AlixPartners' 2026 holiday forecast. That contradiction frames the central question retail and consumer CEOs are wrestling with as the season approaches: will the American shopper keep spending, or finally pull back?

There is one point of agreement among chief executives. The U.S. consumer is anxious, and their spending cannot be taken for granted.

"What we've seen in this economy is a customer across all cohorts of income levels being somewhat distressed, especially in sustained inflation," Dollar General CEO Todd Vasos told a Goldman Sachs retail conference last week.

Yet the American consumer keeps spending — for now, and likely through the end of the year, Fortune's Phil Wahba reports. The AlixPartners forecast shows sales growth even as many shoppers say they should spend less this year. The explanation comes down to a combination of relatively low unemployment, negative headlines, and retailers doling out deals: shoppers know they should tighten their budgets given current events, but they still have money to spend. Instead of retreating, they are squeezing more out of each dollar.

Vasos sees that behavior playing out in Dollar General's aisles. He says households making $100,000 or more are trading down to Dollar General from competitors like Walmart. Meanwhile, customers making $45,000 a year or less — those particularly exposed to high gas prices — are making more store visits but buying less on each one. They stock up on what they need when they have the cash for it.

Macy's CEO Tony Spring said he is contending with wary consumers by pushing forward with the department store's plan to invest more in stores, place more employees on the floor, fine-tune its merchandise assortment, and improve its supply chain. Those upgrades have increased Macy's operational flexibility. Its nimbler supply chain, for instance, makes it easier to cycle out items that are not selling.

Dollar General has responded to the uptick in bargain hunters by ramping up its selection of $1 items.

"There is no straight line unless you can tell me there won't be an inflation increase," said Spring. "There's way too much uncertainty, so we are focused on serving the customers."

The CEOs at the Goldman conference seemed resigned to operating in an environment where agility is required, but that does not mean they are not yearning for some stability.

The biggest question weighing on their minds is how to manage the sheer range of external shocks. Boot Barn CEO John Hazen described the challenge as "everything going on, with diesel prices, oil, a war, interest rates, the Fed."

"Pick your topic," he said.

For now, the bet across the industry is that low unemployment and aggressive discounting will keep anxious consumers opening their wallets through year-end — with retailers that can move fast on pricing, assortment, and supply chains best positioned to capture whatever spending materializes.