American holiday spending is heading for a split screen in 2026, according to Equifax’s October analysis. The firm outlined a possible 2.6% increase in real holiday spending, with outcomes ranging from a 2.4% decline to a 4.1% increase — a wide range that reflects how differently households are feeling this season.
The divide shows up most clearly between big retail and small business. Broader retail real sales rose 2.6% and transactions increased 2.8%, while small-business real sales fell 1.6% and transactions declined 2%, according to the Equifax analysis published October 27. The firm’s Small Business Index declined for an 11th consecutive month, underscoring pressure on holiday inventory and pricing decisions for independent shops.
Higher-income households remain better positioned to spend, the analysis found, while elevated essential costs squeeze lower-income consumers’ holiday budgets. That pattern matches a second, independent data set: Bank of America card data for the week ending October 17 showed total card spending per household up 4.9% year on year, but with spending patterns diverging sharply across income groups and discretionary categories weakening.
Why the gap matters for shoppers
When small shops struggle, choice narrows. A store that cannot afford to stock deeply for the holidays orders less, discounts less, and may close earlier in the season. Shoppers who want something specific — a size, a colour, a local product — may find it only at a big chain or online, and often at a higher price once shipping is added.
The National Retail Federation, in a separate forecast reported October 19, expects holiday retail sales to grow 4.2% year on year to roughly $1 trillion, with nearly half of the nominal growth coming from real spending growth rather than prices alone. That headline and the Equifax small-business decline can both be true: the total can grow while the smallest sellers shrink.
How to shop the split wisely
Start with the shops you want to survive. Independent retailers often match chain prices on the items they carry, and many offer layaway, gift wrapping, or local delivery that a warehouse cannot. Check a small shop’s return policy before buying — it may be shorter than a big retailer’s holiday window.
For bigger purchases, compare the total cost, not the sticker. A chain’s discount can disappear in shipping fees, while a local shop’s full price may include assembly, delivery, or a longer return period. And if your budget is tight this year, the Equifax range itself is useful: a season that could land anywhere from down 2.4% to up 4.1% is a season to plan for the low end and be pleasantly surprised, not the other way round.
