Retail CEOs are heading into the holiday season with a familiar contradiction: shoppers are uneasy, but they are still spending.
Dollar General CEO Todd Vasos told a Goldman Sachs retail conference that 'a customer across all cohorts of income levels' is 'somewhat distressed, especially in sustained inflation.' Yet the spending has not stopped. Consulting firm AlixPartners' 2026 holiday forecast calls for holiday season sales to rise 4% to 7%, even as 57% of Americans say they are worse off than a year ago and many say they should spend less this year.
The numbers come first. The market has already voted. Consumers are trying to stretch every dollar rather than shut the wallet.
Vasos said households making $100,000 or more are trading down to Dollar General from competitors like Walmart. Customers making $45,000 a year or less are making more store visits but buying less on each trip, stocking up when they have cash for what they need.
Macy's CEO Tony Spring said the department store is moving forward with a plan to invest more in stores, put more employees on the floor, fine-tune merchandise and improve the supply chain. Spring said those upgrades have improved Macy's operational flexibility, including a nimbler supply chain that makes it easier to cycle out items that are not selling.
Dollar General has responded by ramping up its selection of '$1 items.' Spring said, 'There is no straight line unless you can tell me there won't be an inflation increase.' He added, 'There's way too much uncertainty, so we are focused on serving the customers.'
Boot Barn CEO John Hazen described the environment as one shaped by 'diesel prices, oil, a war, interest rates, the Fed.' He summed it up in one line: 'Pick your topic.'
That is the real holiday story. Consumers are not acting like confidence has returned, and CEOs are not planning as if it has. They are managing around inflation, higher rates and a wary customer with fewer guarantees than before.
For retailers, the lesson is simple: when households feel squeezed, free enterprise rewards the companies that can adjust fastest. Better inventory, tighter costs and sharper pricing matter more than slogans. Capital rewards clear rules, and in this market the winners will be the operators who can read the demand signal before the season is over.
