Retail CEOs Navigate Anxious Shoppers Ahead of Holidays

Retail chief executives are anticipating a complex holiday shopping season in 2026, marked by a significant paradox: while U.S. consumers express anxiety about the economic and political landscape, they are simultaneously demonstrating a continued willingness to spend. This sentiment was a key takeaway from a recent Goldman Sachs retail conference, where leaders discussed the dual pressures of inflation and economic uncertainty impacting consumer behavior. Dollar General CEO Todd Vasos noted that customers across all income levels appear "somewhat distressed," particularly in the context of sustained inflation. Despite these concerns, AlixPartners' 2026 holiday forecast projects a 4% to 7% increase in holiday season sales. This projection stands in contrast to the sentiment of 57% of Americans who report feeling worse off financially than they were a year ago, with many indicating an intention to reduce their spending this year. The contradiction is attributed to a confluence of factors, including a relatively low unemployment rate, a constant stream of negative headlines, and proactive promotional strategies by retailers. Shoppers are aware of the need to conserve funds due to current events, yet they possess disposable income and are strategically seeking greater value for their money. Vasos observed this trend within Dollar General's customer base, highlighting that households earning $100,000 or more are increasingly opting for Dollar General over competitors like Walmart, a phenomenon known as trading down. Concurrently, customers with annual incomes of $45,000 or less, who are more susceptible to the impact of high gas prices, are increasing the frequency of their store visits but reducing the average value of each transaction. These shoppers are prioritizing essential purchases and stocking up when funds are available. Macy's CEO Tony Spring is also adapting to this cautious consumer environment by adjusting strategies to align with shopper expectations. The overall sentiment among retail leaders is one of cautious optimism, acknowledging the underlying consumer anxiety while preparing for a potentially robust, albeit value-driven, holiday sales period. This environment necessitates a keen focus on pricing, promotions, and product assortment to capture consumer spending effectively. The ability of retailers to balance promotional offers with maintaining profitability will be a critical determinant of success during the upcoming holiday season, as consumers meticulously evaluate their purchasing decisions.