Despite global conflicts, rising fuel costs, macro-economic uncertainties and declining consumer sentiment, U.S. retail sales should grow in 2026, and in a bigger way than during the last few years. National Retail Federation forecast retail sales will increase 4.4% to $5.6tn this year. That compares with the 3.6% average annual U.S. sales growth over the last 10 years, excluding the pandemic period from 2020 to 2022 when growth was atypical. A significant portion of the 4.4% increase is real growth and not just inflation. The spending outlook is still bifurcated between higher- and lower-income consumers (K-economy), with higher-income households driving the majority of growth in spending across a range of retail categories.