Main Street America, an organization that works to promote downtowns throughout the country, released details on what they saw as trends for 2026 in small business. According to Matt Wagner, Ph.D., Chief Innovation Officer, some of the trends that began in 2025 would likely continue into 2026.
“We will likely see big impacts from the emerging “K” Economy which is an economy that favors higher income earners while middle- to lower-income earners may see a downturn,” Wagner said. “This creates an economy that relies on a much smaller group of consumers to fuel growth. We will likely see upper-income households feel more confident in driving spending while lower-income individuals may not see the ability to pivot, leading to less spending. Businesses can address this by demonstrating good value for both high-income and low-income earners.”
Shifts in social media may come to a head in 2026 as other countries pass laws restricting social media use among children. There is more of a push for social interaction and businesses that offer that connection, such as coffee shops, cafes and other gathering places, should benefit from this trend.
“There are some very significant policy and event-related activities that I think will highlight Main Streets this year,” Wagner said. “First is America 250, the celebration of America’s 250-year anniversary. What’s more American than to celebrate where manufacturing got its start in the USA – Main Street. This, combined with trade isolation, creates opportunities for small-scale manufacturers to enter the market on Main Streets.”
As Baby Boomers and Gen-Xers age, Millennials and Gen-Z will drive higher spending and significant shifts across retail sectors. Businesses need to focus their marketing on younger generations in an effort to meet that market.
“The challenges for individual asset-ownership by Millennials and Gen-Z are well documented,” Wagner said. “But we are in the midst of the largest transfer of wealth in American history. With opportunity and demand, there will be both policy and programmatic pushes for more creative finance structures, opening the door for young people to enter the business world.”
Brick-and-mortar is making a comeback, according to Wagner. This may be because online shopping has become a race to the lowest price rather than a race for quality. The return of physical stores is also connected to the need for community and connection, leading more people to leave home and shop.
“A recent Gallup Poll found that only 54 percent of U.S. adults consume alcohol, the lowest level in nearly 90 years, down from 62 percent in 2023 and 58 percent in 2024,” Wagner said. “The decline is most pronounced among 18-34-year-olds with only half reporting drinking. This data coupled with the growth of inhibitors like GPL-1 drugs, will likely lead to a sizable decrease in the demand for restaurants and bars that predominately serve alcohol. Restaurants and bars who shift to a large “mocktail” menu may be more successful.”
Consumers are also keeping products and materials in use longer. Instead of disposing something that may have a minor problem, they are repairing or refurbishing. Businesses who focus on reuse, repair, refurbish and recycle may see significant growth.
“For example, an outdoor recreation store that sells bikes, does repairs, takes trade-ins, fixes up old bikes for resale, repurposes bike parts for resale and even provides equipment rental services will do well in 2026,” Wagner stated.
The predicted trends for 2026 show great opportunities for small businesses. One trend Wagner suggested small businesses should not avoid is integrating AI. In fact, companies with fewer than 50 employees eliminated 120,000 jobs in November 2025 and factors for that loss included limited ability to execute on AI to increase capacity.
Main Street offers a wide range of support and resources for small businesses. Downtown Milford Inc. is an accredited Main Street organization and can help businesses gain access to these resources. Contact them by calling 302-393-6808, send an email or visit them online.
