Holiday Sales to Hit $1 Trillion as Target, Walmart Battle on Price

By James Calloway

The National Retail Federation projects U.S. holiday sales will reach $1 trillion for the first time. Nearly every major brick-and-mortar retailer — Target, Walmart, Kohl's, Best Buy, Macy's and Lowe's — released Black Friday and Cyber Monday plans within the past week, opening a season defined by stretched budgets and AI-assisted shopping.

Retailers are extending proven tactics. Many are lengthening Cyber Week sales by a day or two. Lowe's and Best Buy started Black Friday-style deals before the end of October. The difference this year: inflation and uncertain consumer sentiment add pressure that earlier seasons lacked.

"There are going to be a lot of unknowns coming out of this holiday, and it's really going to be hard to pick who the winners are going to be at this point in time," said Michael Brown, partner and Americas Retail Leader at Kearney.

Who wins the price battle?

Value messaging now dominates. Target announced in September that it would lower prices on nearly 2,000 home and apparel products. Kohl's says it will offer nearly 2,000 beauty items under $30 through its Sephora partnership. Target counts 8,000 new gifts in its holiday assortment, with more than half priced under $20.

Price point is "becoming more and more important to shoppers whose fixed costs have gone up faster than their wages have, particularly with fuel costs being high," said Bryan Gildenberg, founder of Confluencer Commerce.

Retailers assume shoppers hold strict budgets and will try to squeeze maximum value from them. A gas price spike in November or December could force more aggressive marketing.

Brown said the price fight favors two players: "Amazon and Walmart are really the leaders in the ability to do that." He added: "They have that advantage of convenience. Walmart customers are always in the store. Amazon is really easy, and now Target and Macy's and others have to chase that with their compelling affordability and the products."

How far can category creep go?

Retailers are pushing into new categories to capture more share of wallet. Lowe's holiday press release urged customers to "give the gift of fewer to-dos" with a HomeCare+ gift card. HomeCare+ costs $99 per year and covers two visits annually with up to seven essential home maintenance services — air filter replacements, dryer vent cleaning and more — performed by trained Lowe's associates. The release also promoted toys, bedding, apparel and gifts from its Heart & Heard pet brand plus expanded holiday decor.

"When retailers try to get a little bit too far outside of the core reason why the shopper is there, it gets weird and confusing pretty fast," Gildenberg said. With Lowe's, he argued, home-related products "can fit into the Lowe's proposition."

Target is stretching categories with 350 Harry Potter-inspired exclusive products hitting stores and its website Nov. 7, timed to the new HBO series debuting Christmas Day. The line spans apparel, home decor, accessories and collectibles.

Is agentic commerce the wild card?

AI shopping assistants enter their first full holiday test. Target rolled out Ask Target in beta this month. Walmart and Lowe's launched their assistants, Mylow and Sparky, in 2026. The tools serve as gifting consultants — for example, finding quiet-luxury clothing and accessories under $50.

Full performance data will not arrive until retailers report fourth-quarter earnings in early 2027.

Brown expects shoppers to use ChatGPT and Gemini alongside retailer tools for surgical price monitoring. That raises the risk a retailer loses a sale "if an agent goes out and it just happens to be the day that Macy's is a couple dollars cheaper," he said.

"Agentic commerce is really the wild card this holiday season," Brown added. "Who's going to get the lion's share of this automated shopping without the consumer really looking at everything that's out around them?"

Also in the news

• The FTC and 20 states sued Dollar General over pricing practices, accusing the retailer of repeatedly charging more than advertised prices.
• Target overhauled Threshold, its largest owned home brand, to regain market share in the category.
• Walmart's chief marketing officer discussed the inspiration behind its Muppet-themed holiday campaign in interviews this week.

The $1 trillion forecast guarantees spending. Which retailers capture it — and how much AI agents steer it — will decide the season's winners.