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Thanks to an uptick in consumer spending, an increase in traffic and a boost in profit opportunities in a short window of time, the holiday selling season—Halloween, Thanksgiving, Black Friday, Cyber Monday and Christmas—is especially important for ending the year strong in sales.
According to Deloitte’s annual holiday retail forecast, holiday retail sales are projected to total between $1.70 trillion and $1.71 trillion during the November 2026 through January 2027 period, representing an increase of 4.0% to 4.8% from the same period in 2025.
“Consumers continue to place importance on making the holidays special for their friends and families, while also making deliberate choices about how they spend. As they look to get more out of their dollars, we continue to see value-seeking behaviors across income levels, including switching among brands and retailers and using promotions to manage spending,” says Natalie Martini, vice chair, Deloitte, and U.S. retail and consumer products leader. “These behaviors are expected to shape how consumers approach holiday shopping this season.”
Many independents, not able to compete with large chains on price alone, instead lean into product knowledge, unique merchandise, local relationships, gift recommendations, convenient fulfillment and a compelling in-store experience. As retailers plan for this crucial selling season, Hardware Retailing sat down with National Retail Federation (NRF) senior analyst Lea Grgich and The Farnsworth Group’s senior advisor Karen Barnes and president and senior consultant Grant Farnsworth, who shared helpful insights on consumer expectations going into the end of 2026.
Hardware Retailing: What are the biggest trends shaping this holiday season?
Lea Grgich: As we saw during the summer and the back-to-school season, affordability is a key consideration for shoppers. Consumers continue to prioritize spending moments such as back-to-school and major holiday celebrations, but they’re also being increasingly thoughtful about how they spend. Many are comparing prices across retailers, making trade-offs in other areas of their budgets, seeking promotions and discounts and spreading purchases over a longer period to manage costs while still buying the items that matter most to help make occasions and holidays special.
Karen Barnes: The story of this holiday season is a more deliberate customer. Homeowners haven’t stopped spending, but they’re being more selective about where and how. Our research shows maintenance and necessity-driven projects—the things people do regardless of economic conditions—remain the most consistent category of activity, while bigger discretionary projects are more likely to get pushed to someday.
Grant Farnsworth: Findings from The Farnsworth Group and the Home Improvement Research Institute’s (HIRI) Q2 2026 Homeowner Project Activity Tracker show that homeowners doing home improvement projects dropped from 44% in Q2 2025 down to 38% for Q2 this year. Further, 76% of those projects completed were home maintenance-related, versus only 36% for home renovation. For retailers, that means the 2026 holiday season will likely reward those who can clearly demonstrate value and help customers feel confident about a purchase, rather than those relying on volume or foot traffic alone.
Which retail categories are expected to be winners and losers?
Grgich: While it is still too early to predict which gifts or brands will resonate most with shoppers, retailers are working to offer compelling prices, convenient options and seamless shopping experiences this holiday season. One category showing early momentum is personal care, which saw strong consumer interest around both Father’s Day and the back-to-school season. That trend suggests shoppers are increasingly prioritizing self-care and wellness purchases for loved ones and themselves, making personal care a category to watch.
Barnes: Behavioral patterns are consistent across The Farnsworth Group’s research: purchases tied to necessity, upkeep or clear functional value hold up best in a squeezed market, while big-ticket, purely discretionary items are the first to get delayed. Quality and durability continue to be the top purchase drivers for most homeowners, ranking above price for younger buyers especially, so products or gifts that clearly signal lasting value are likely to outperform products competing on price alone.
Farnsworth: We typically see yard, garden and landscape projects at their lowest point over the holiday season. As our Homeowner Project Activity Tracker shows, 26% of those doing a project completed an outdoor project in October to December last year. Last season, bathroom projects were most popular. Bathroom projects and kitchen projects remain popular throughout the year because they are not seasonal in nature.
How will inflation—or broader economic uncertainty—affect consumer spending this holiday season?
Barnes: Demand for home improvement projects hasn’t disappeared; it’s just become more conditional. On top of that, disposable income is under pressure from multiple directions right now, not just tariffs, but rising fuel costs and cooling wage growth as well. For holiday shoppers specifically, we’d expect that same conditional mindset to show up as smaller, more considered purchases rather than an outright pullback. We’re also seeing a K-shaped pattern play out across the industry: higher-income households (top 20%) continue to spend more freely and account for approximately 50% of home improvement spend, while everyone else is watching their budget more closely. That divide will likely show up in what sells this holiday season. Retailers who can reduce the guesswork through financing options, clear value messaging or bundling are best positioned to convert that hesitant demand into a sale.
Farnsworth: There’s a real gap opening up between what homeowners want to do and what they’re actually doing. The Farnsworth Group and HIRI’s Q2 2026 Homeowner Project Activity Tracker found that more than one-third of homeowners who started a project this year ultimately postponed or canceled it, most often citing financial concerns. Additionally, nearly three-quarters say they have a project in mind they simply haven’t started yet.
How important are online sales versus in-store sales this year?
Grgich: While NRF’s 2026 back-to-school survey found a slight pullback in online shopping among both K-12 and college shoppers, consumers continue to take an omnichannel approach to major spending events and holidays. Increasingly, shoppers view purchases through a retailer’s website, app or store as part of the same shopping experience, while using multiple channels to compare prices, research products and find the best value. Retailers remain committed to providing a seamless experience that makes it easy for consumers to shop however and wherever they choose.
Barnes: For independent retailers specifically, we’d expect them to skew more in-store than the broader retail category overall because independents’ advantage has always been expertise and personal service—differentiators that are harder to replicate online—and that matters even more to a customer who’s being more careful with each purchase this season.
Farnsworth: Retailer websites remain the most-used research and shopping channel across every generation, from roughly 59% of Millennial and Gen Z DIYers up to about 79% of Boomers, so digital research is now a non-negotiable part of the path to purchase regardless of age. But there’s a generational divide in where the actual dollars go: younger buyers are shifting more of their spend toward channels like Amazon compared to older generations, while big-box retailers still capture the largest overall wallet share.
What indicators will you be watching to judge the season’s success?
Grgich: The back-to-school season acts as a barometer for the winter holidays. Even though consumers are still cautious, record spending on K-12 and college preparations shows shoppers will continue to spend in the face of higher gas prices and inflation. As we approach the winter holiday season, monthly reports like the CNBC/NRF Retail Monitor will provide important insights into retail sales trends and consumer spending. We’ll also be watching key moments throughout the season, including the Thanksgiving shopping weekend, to better understand consumer demand for deals and promotions.
Barnes: We’d watch a few things closely this year, including whether retailers see meaningful growth in transaction counts and units sold, not just dollars, since that tells you whether more people are actually walking through the door versus a smaller number of people spending more. We’d also watch average purchase size as a signal of whether bigger holiday purchases are happening or getting scaled down. And we’d keep an eye on project postponement and deferral rates; if more homeowners are pushing off planned purchases as the season goes on, that’s an early signal that budget pressure is winning out over holiday spending intent.
