Will Retail Bifurcation Persist (or Intensify) in 2026?

According to recent Placer.ai data measuring U.S. consumer foot traffic over this most recent holiday season, one word stood tall in the analysis presented: bifurcation.

A deepening and persistent divide appeared within several key data points presented by Placer.ai's head of content, Shira Petrack, including between product categories shopped, different physical retail settings, and types of merchants. However, overall growth in terms of traffic was observed both in the retail space (up a healthy 2.8% from Nov. 1 through Dec. 24, 2025, versus the year prior) and the dining and restaurant segment (up a more modest, but still notable, 1.6%).

"Bifurcation has been a defining trend of consumer behavior in 2025 and continued to shape shopping patterns during the holiday season. Thrift stores and off-price retailers led the apparel category with traffic up 11.7% and 6.6% (November 1st to December 24th, 2025), respectively, compared to last year’s holiday period," Petrack wrote.

"Luxury chains and department stores also posted modest gains (+1.8%), while traditional apparel chains saw slight declines (-1.8%) and mid-tier department stores experienced more pronounced traffic drops (-6.2%)," she added.

Retail Bifurcation Shows Itself to Favor Wholesale Clubs, Thrift and Dollar Stores, Open-air Shopping Centers While Mass Merchants and Mid-Market Department Stores Suffer

Other interesting findings brought forth by the report:

• Open-air shopping centers outperformed indoor malls as well as outlet malls: Underscoring the experiential nature and festive atmosphere conjured up by many open-air shopping centers, Petrack noted that visits to these venues were up 1.7% over the holiday season. This comes in contrast to the slighter gains exhibited by traditional mall traffic (up just 0.8%), and the actual losses -- perhaps surprisingly, given the current U.S. consumer's stated fixation on value -- of traffic to outlet malls (down 0.8%).
• Concerning the superstore category more specifically: Wholesale clubs led the pack in terms of traffic growth (improving by 7.5% YoY), with dollar stores and discount stores not that far behind (up 6.9% versus 2024's figures). Mass merchants, however, exhibited much more tepid foot traffic growth of just under 1% (0.9%, to be precise), a perhaps-ominous figure for retailers within that segment.
• Pet stores and services, home improvement, and recreational and sporting goods beat traditional holiday winners such as home furnishings and electronics: Traffic to the latter two categories fell by 0.8% (for home furnishings) and a more notable 1.5% (for electronics stores), while pet stores and services saw a significant uptick in traffic (up 5.5%), as did home improvement retailers (3.4%) and sporting goods retailers (1.1%). The shift was attributed to growth in interest around self-gifting, as well as practical gifting over more "outward-facing" holiday gifting.

"The outperformance of thrift, off-price, wholesale clubs, and self-gifting categories underscores a consumer mindset that is both pragmatic and selective, balancing budget consciousness with targeted willingness to spend," Petrack suggested.

"Looking ahead to 2026, these patterns suggest that retailers should move beyond one-dimensional value messaging and instead sharpen their core propositions. Formats that clearly articulate why they are 'worth the trip' -- through pricing power, assortment differentiation, or alignment with everyday consumer priorities -- will be best positioned to win share. As bifurcation persists, success will increasingly depend on understanding which consumer needs a brand serves best and doubling down on those strengths, rather than attempting to compete broadly across a squeezed and highly segmented retail landscape," she concluded.