Inflation has cooled. Growth hasn’t collapsed. Yet consumers still feel under pressure.
That’s the defining contradiction heading into 2026.
Across the U.S. and Canada, the economy is stabilizing on paper while behavior remains cautious in practice. Households are spending selectively, businesses are absorbing costs that haven’t fully shown up in prices yet and leadership teams are under growing pressure to prove that every customer investment delivers measurable impact.
For loyalty leaders, this is a moment that rewards clarity. The economy has changed and loyalty needs to evolve with it.
In this article, we connect the most credible macro signals in the U.S. and Canada to real customer behaviour and what it means for loyalty strategy in 2026.
In the U.S., growth is moderating into a slower, more durable rhythm.
According to the Morningstar US Economic Outlook (Q4 2025), real GDP growth is forecast to average:
That’s a meaningful deceleration from the post-pandemic rebound, but not a recessionary signal. It’s a “lower-for-longer” environment.
Canada’s outlook is even tighter. The Business Development Bank of Canada (BDC) projects GDP growth of just 1% in 2026, down slightly from 1.2% in 2025, as trade uncertainty and elevated costs weigh on activity.
What this means for loyalty leaders: In stable-but-slow economies, consumers don’t disengage. They become more deliberate. That makes loyalty less about inspiration and more about justification.
Inflation is no longer accelerating, but it hasn’t disappeared from household decision-making.
Morningstar expects U.S. inflation to average 2.6% in 2025 and 2.7% in 2026, easing closer to 2.0% by 2028–2029. In Canada, BDC forecasts inflation around 2% in 2026, closer to target but still layered on top of permanently higher prices for essentials.
Food, housing and utilities take up a larger share of household budgets, especially in Canada. Even though disposable income continues to grow, discretionary room is narrower.
For loyalty programs, this means:
What this means for loyalty leaders: In 2026, loyalty that offsets everyday spend aligns better with persistent price sensitivity than loyalty that promises future perks.
One of the most important U.S.-specific dynamics heading into 2026 is tariffs.
Morningstar expects the stated average U.S. tariff rate to decline from about 14% in 2025 to 12% in 2026, potentially falling further depending on pending Supreme Court decisions. But the actual tariff burden is expected to remain near 9%, essentially flat year-over-year.
So far, consumers haven’t felt the full impact.
Core goods prices have risen only about one percentage point cumulatively, while import prices including tariffs are up nearly 10%. The difference has been absorbed by businesses relying on pre-tariff inventory, but that inventory is running out.
As companies begin passing costs through in 2026, price pressure is likely to re-emerge, even without new macro shocks.
What this means for loyalty leaders: This means that value needs to show up where prices rise first. Everyday, transaction-level rewards help soften that adjustment in a way promotions and points cannot.
Consumer spending remains resilient, but momentum is fading.
In the U.S., Morningstar reports:
Goods consumption growth has cooled from 4.6% early in 2025 to 3% year-over-year, as households pull back after stockpiling ahead of tariffs.
Canada shows a similar pattern, with discretionary spending squeezed by food and housing costs even as wages rise about 3% on average.
What this means for loyalty leaders: Loyalty programs built around expanding baskets and impulsive behaviour face headwinds. Programs that reward repeat, habitual spend remain aligned with how consumers actually behave.
Even if rate cuts arrive, expectations have reset.
Higher interest rates have made consumers more sensitive to cash flow, debt and delayed benefits. Carrying balances feels expensive. Big purchases feel heavier. Financial stress lingers longer.
That shift has two loyalty implications:
Embedded loyalty — delivered automatically through payments — performs well here because it doesn’t ask customers to think harder or wait longer. It meets consumers where financial decisions already happen.
Customer acquisition costs remain elevated. Growth teams can’t rely on cheap traffic or endless experimentation.
As a result, retention has moved from a marketing KPI to a financial lever. Leaders want to see:
This scrutiny favours loyalty models that are measurable by design. Card-linked and embedded programs connect rewards directly to spend, making it easier to defend investment decisions in uncertain budgets.
The economy hasn’t snapped back, but it’s starting to settle after major macro shocks over the past few years. Consumers are cautious, not disengaged; and budgets are tighter, not frozen.
Taken together, the 2026 economic reality demands loyalty that is:
The brands winning loyalty in 2026 aren’t offering more. They’re offering better-aligned value.
If you’re rethinking loyalty strategy for 2026, start with how customers actually feel, not just what macro indicators suggest.
Olive helps brands deliver everyday, embedded loyalty value tied directly to real spending and measurable outcomes.
Book a demo to see how Olive helps you build loyalty for today’s economic reality.