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AlixPartners forecasts holiday sales rising 4% to 7%, a range whose top end is 1.75 times its bottom
AlixPartners puts 2026 holiday sales growth at 4% to 7% while 57% of Americans say they are worse off than a year ago. One of the three reasons it gives for the gap is discounting that retailers fund themselves.
The Investor · Invest desk
What happened
- AlixPartners' 2026 holiday forecast has U.S. holiday season sales rising 4% to 7%, a band retailers must buy and staff against before the season resolves it.
- Dollar General CEO Todd Vasos says households making $100,000 or more are trading down to his stores from competitors like Walmart, a shift of traffic between chains.
- Shoppers making $45,000 a year or less are visiting more often and buying less each time, stocking up on what they need when they have the cash for it, Vasos says.
- Fortune credits three things for spending holding up against sentiment: relatively low unemployment, negative headlines, and retailers doling out deals.
Compiled by The InvestorSomething wrong?How this is made
Why it matters
- constraint Seasonal labour and inventory are locked in before anyone knows which end of the band arrives, so ordering to the midpoint is a decision about which way to be wrong.
- exposure A market-level growth figure leaves any individual chain's comps undetermined; the retailer losing the traded-down household faces the same forecast that flatters the one gaining it.
- decision If discounting is one of the reasons the spending holds up, every chain has to decide how many points of gross margin it will spend to keep traffic.
- contradiction A demand model cannot take both the survey majority and the sales forecast as inputs; it has to pick which of the two it treats as the signal about the next quarter.
Inventory for December is committed in units, months early, and the band AlixPartners has given is 4% to 7% [1]: three points wide, with the upper end 1.75 times the lower [1]. Fortune's account states the forecast as sales growth and does not break it into price and volume [13]. A 4% dollar gain that is mostly price and a 7% gain that is mostly units call for different buys. Dollar General CEO Todd Vasos described the customer being bought for. It is one "across all cohorts of income levels being somewhat distressed, especially in sustained inflation," he told a Goldman Sachs retail conference last week [4].
Trading down transfers a sale between chains without adding one to the market. The household Vasos described leaving Walmart for Dollar General [5] adds traffic at one chain and takes it from another. A market band of 4% to 7% is compatible with a retailer inside it posting flat comps. Dollar General's answer to more bargain hunters has been a wider selection of $1 items [7].
The deals leg of the explanation is the one a retailer pays for itself. Growth purchased with promotion lands in the sales line and leaves through gross margin, so 7% is not automatically the better outcome for earnings than 4%.
I would expect the dollars to land nearer the bottom of the band. Both cohorts Vasos described push the average ticket down: the $100,000 household by buying cheaper goods [5], the $45,000 household by buying less on each of more visits [6]. The other way it runs is that the 43% of Americans who do not say they are worse off than a year ago [2] spend as usual, and price alone carries the dollar figure toward 7% with units flat. Employment is what would break the forecast outright. Low unemployment is the only one of the three reasons AlixPartners gives with cash behind it [3]. If payrolls turn, the 57% who say they are worse off [2] begin spending like it.
Macy's is spending into the uncertainty. CEO Tony Spring is putting more money into stores, more employees on the floor, a fine-tuned merchandise assortment and a supply chain nimble enough to cycle out items that are not selling [8]. "There is no straight line unless you can tell me there won't be an inflation increase," Spring said [9]. "There's way too much uncertainty, so we are focused on serving the customers" [10].
Boot Barn CEO John Hazen said the biggest question on chief executives' minds is how to manage "everything going on, with diesel prices, oil, a war, interest rates, the Fed" [11]. "Pick your topic," he said [12].
What to watch
- Whether AlixPartners or its clients publish a split of the 4% to 7% between price and units. That split decides how much of the growth can be bought against.
- Whether Walmart describes the same trade-down flow from its side of the transfer that Vasos describes from Dollar General's.
- Dollar General's next report on transactions versus average ticket, the pairing that would confirm more visits with smaller baskets.