Forrester 2027 retail predictions: ‘Real’ U.S. sales growth to be near 0%
From private equity takeover of struggling retailers to flat sales growth, Forrester’s “Predictions: 2027 Retail” offers insights into what will shape the upcoming year.
Value will be the dominant theme, according to the report. Retailers should prepare for a market where value carries more weight than ever as shoppers focus on affordability, advised Forrester.
“Some retailers will race to the bottom with competitive pricing,” the report states. “But others that are long-term-outcome-focused will strengthen customer retention programs, invest in operational excellence, create distinctive products that cannot be easily price-compared, and apply AI where it delivers measurable business outcomes.”
[READ MORE: Affordability top of mind for holiday shoppers]
Here are three predictions for 2027 that Forrester expects may shape the year.
•Real U.S. and Europe retail sales growth will be near 0%.
While nominal retail sales will remain positive in 2027, they are already trending toward the lowest single-digit level since the pandemic, a figure that is likely to be lower than inflation. That means unit and volume growth will be essentially flat for the retail industry overall
Inflation (particularly from high energy costs) and persistent economic pressure will leave retailers fighting for share rather than benefiting from meaningful market expansion. Even essential goods retailers that benefit from many consumer goods categories will find themselves challenged by shoppers who scrutinize nearly every purchase decision
What to do: In 2027, retailers should plan for lean marketing budgets and limited room for promotions. Customer retention strategies
•Private equity will try funding AI-powered turnarounds at struggling retailers.
Private equity has already been a powerful force in retail, providing debt-laden retailers with an attractive exit strategy. Forrester sees PE taking at least Kohl’s and Macy’s these two significant retailers private, with a central investment thesis built around agentic AI, automation and labor cost reduction. The result is unlikely to meet the bravado. The short-term benefits of AI, particularly from LLMs, are still a work in progress.
What to do: Retailers that are financially solid and are willing to invest in “nuts and bolts” (e.g., retail planning, warehouse management, store refreshes) are well positioned to take share from those that PE acquires.
•Google will transform agentic shopping by focusing on deals and drops.
In 2027, Forrester expect answer engines to shift from broad product discovery to finding the best price, To jumpstart that move, it predicts Google will acquire or integrate a deal-finding specialist with capabilities similar to Stretch or CartHappy, effectively creating a grocery and household spending equivalent of GasBuddy.
What to do: Merchants need to invest in product and packaging innovation or they will perish.
•Amazon, Walmart, and Costco will become (almost) a $2 trillion trio.
The combined annual gross merchandise value (GMV) of Amazon, Walmart and Costco already tops $1 trillion, and in a tight retail market, these retail behemoths will continue to gain share. Their secret sauce: scale, not format. And their gains will come partly at the expense of traditional grocers and weaker general merchandisers that have made unforced errors.
•eBay will unexpectedly double growth as supply and secondhand demand propagate.
Agentic solutions are perfect to scale the product and content information of one-off goods — one of the original challenges with online resale models like ThredUp. As shoppers look for ways to save and are more conscious about wasteful consumption, particularly in categories like apparel, preowned goods stand to once again thrive in an uncertain economy.
Retailers, advised Forrester, need to think about their role in a circular economy.
