LMC 2026 outlook survey: Retailers start year optimistic

The basics:

• Annual LMC survey finds retailers enter 2026 optimistic despite inflation, labor cost concerns
• Stores prioritizing operational discipline, strong service, technology investments
• About 43% of stores made or plan operational adaptations — AI, automation, payment tech leading
• Hiring remains active; roughly one-quarter plan new store openings in 2026

Retail store managers feel optimistic, but plan to keep a close watch on consumer confidence, inflation and labor costs, according to Levin Management Corp.

After conducting its annual Retail Outlook Sentiment Survey, the North Plainfield-based commercial real estate services firm found that overall retailers entered 2026 with steady demand but heightened price sensitivity.

As a result, many are doubling down on operational discipline, service and technology that improves execution, LMC said.

LMC Chief Executive Officer Matthew Harding believes 2026 is shaping up as “a year where execution will matter more than ever.”

“With consumers focused on value, retailers are doubling down on fundamentals — strong service, tight inventory discipline and technology that improves efficiency in the store,” he said.

To compile this year’s report, LMC polled store managers in its 125-property leasing and management portfolio across the Northeast and Mid-Atlantic regions.

What’s in store?

According to LMC:

• 68.6% expect their store to perform much better in 2026
• 71.9% reported 2025 holiday sales came in the same or higher than the 2024 season
• 64.3% reported total 2025 sales the same or higher than the prior year
• 71.3% cited the economy and consumer confidence as top factors expected to impact business in 2026
  • 69.4% said inflation/rising costs
  • 36.1% identified labor availability and labor costs

Over the past year, 24.1% reported no price increases in response to inflation, while 38.8% said prices rose under 10%. Looking ahead, 35.5% said they anticipate raising prices further in 2026. Meanwhile 44.9% said they are not sure. LMC said uncertainty underscores concerns around costs and consumer response.

Hiring remained active, with 42.6% currently hiring, LMC said.

Tech investments

According to LMC, major store reinvestment plans are limited, but some retailers will still pursue selective growth. About one-quarter said they plan to open additional locations, the survey found.

On operations, 43% said they have made adaptations recently or plan to do so in the near future. Technology investments such as AI, automation and payments led the list (40.9%), followed by customer experience and training (34.8%), and loyalty and promotions (34.8%), LMC reported.

When asked to choose the single primary advantage of brick-and-mortar retail, store managers most often selected in-person customer service and support (39.8%), followed by the social experience of in-person shopping (17.6%), brand- and loyalty-building capabilities (15.7%), product discovery (13%) and the convenience of getting it now (9.3%).

LMC Vice President of Marketing and Corporate Communications Melissa Sievwright commented, “Our survey shows technology has quickly become the most common adaptation retailers are prioritizing, from AI and automation to payments and other tools that help teams work faster and serve customers better.”

She added, “Retailers are looking for practical technology that strengthens day-to-day execution and supports customer service at the store level.”

Since 2011, LMC has issued its retail sentiment survey three times a year. The next survey will take place in June with a focus on midyear performance and technology trends, the firm said.