US Retailers Beware: Deloitte Projects Lowest Holiday Sales Growth Since Pandemic

Research and consultancy firm Deloitte on Wednesday forecast that U.S. holiday sales will grow at their slowest pace since the pandemic, a warning for retail businesses already pushed against the wall navigating tariff headwinds.

The holiday season, spanning from early November to New Year's, marks the busiest shopping period of the year, as retailers lure consumers with deep discounts to drive sales.

Sales during the November 2025-January 2026 period are expected to rise between 2.9% and 3.4%, compared to a 4.2% increase in the same period last year, according to a report from Reuters, citing Deloitte.

The forecasts are based on data from agencies including the United States Commerce Department and the United States Bureau of Economic Analysis.

Sales increased by 7.2% during the holiday season of 2020-2021, following a 4.9% rise in 2019-2020.

Deloitte also forecast e-commerce sales to increase between 7% and 9%, in line with 8% growth last year, and in-store sales to rise between 2% and 2.2% versus 3.4% growth a year ago.

The projections are worrisome and could compound the disruption from higher operational costs associated with U.S. tariffs, ultimately hurting their earnings. Tariffs have prompted some retailers and brands to raise product prices, which might potentially deter purchases.

Retailers have issued mixed forecasts recently. Target and Best Buy have maintained their annual outlooks, while Walmart and Macy's have raised theirs.

So far this year, the SPDR S&P Retail ETF (XRT), which tracks retail stocks covering supermarkets, automotive, apparel, and restaurants, has gained 8.2%, below the 10.3% gains in the SPDR S&P 500 ETF (SPY).

The Stocktwits retail sentiment for these funds is 'neutral' and 'bullish,' respectively.

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