PREDICTIONS FOR 2026
2025 PREDICTIONS RECAP
RETAIL
Safety Will Be Paramount as Theft and Violence Grow The NRF reports that retail theft and violence continue to grow at an alarming rate, and this issue will continue to cause great concern among retailers in 2026. Follow our 10-step plan to address this issue head on. Predictive Schedule Becomes Normalized Fair Workweek laws will break out of coastal cities and become a national retail issue. More jurisdictions will adopt advance-notice and predictability-pay rules, pushing retailers to standardize scheduling practices across all locations. Expect heavier enforcement, higher compliance costs, and rapid adoption of AI-driven scheduling tools to stay ahead. Profitability Will Split the Industry Economic and political uncertainty will create a two-track retail economy. Brands recovering from weak 2024–25 numbers will treat 2026 as a rebuild year and push hiring and expansion. Strong-performing brands may actually pull back – tightening labor, slowing growth, and protecting margins in a volatile environment. Strategic discipline will matter more than size. Goodbye, Penny?
Retail was hoping that the economic news would be positive enough to boost consumer confidence. And while consumer spending did rise in some segments, it did not do so with the strength or consistency we predicted. Inflation cooled, but economic uncertainty and uneven wage growth kept many shoppers cautious. Big-ticket purchases lagged, and several major retailers reported softer-than-expected Q2–Q3 numbers. We also didn’t get the broad tax-cut extension needed to meaningfully boost consumer confidence. Some retailers saw early-year lift, but it flattened out by fall. We Didn’t See the Massive Spending Uptick We Expected We correctly identified that state and local wage hikes would accelerate across the country, pushing many retailers to raise starting pay to stay competitive. Entry-level wage gains did create compression issues exactly as we forecast, forcing retailers to adjust mid-tier pay to retain experienced workers. Even without a federal wage increase, the pro-worker posture of the administration and state-level competition kept upward pressure on retail wages all year. Retail Wages Increased Tariff uncertainty delivered the disruption we predicted. Retailers dependent on China faced higher costs, tighter margins, and longer lead times. That pushed some brands to cut hours, slow hiring, or delay store investments. Others scrambled to diversify suppliers, which drove up logistics complexity just as we predicted. The volatility didn’t sink the sector, but it absolutely reshaped planning, pricing, and workforce decisions. Tariffs Caused Workplace Disruption Organizing efforts intensified even more than we projected. Retail remained a high-priority target, with new campaigns popping up in apparel, home goods, specialty retail, and grocery. The administration’s labor-friendly stance, combined with ongoing worker frustrations over scheduling, pay compression, and safety, fueled steady union momentum. Unions Continued to Focus on Retail
The end of penny production will be felt in 2026. Retailers will need to adjust .99-pricing strategies, prep POS systems for rounding (if legally permissible), and brace for consumer-trust issues – and possible litigation for rounding overcharges, failure-to-disclose issues, and state price regulation violations.
Brian Balonick Pittsburgh Regional Managing Partner, Co-Chair
Frank F. Martinez New York Partner, Co-Chair
OUR PREDICTIONS WERE MOSTLY RIGHT
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