US retail sales are expected to grow between 2.7% and 3.7% year-over-year in 2025, reaching between $5.42 trillion and $5.48 trillion, according to a report by the National Retail Federation.
This estimate compares to a rise of 3.6% in annual sales to $5.29 trillion in 2024. It also aligns with the 10-year pre-pandemic average annual sales increase of 3.6%.
The report highlighted that significant policy uncertainty is responsible for the broad range of its forecast.
The NRF also expects PCE inflation to remain at its current rate of 2.5%.
Matthew Shay, NRF’s president and CEO, said: “Overall, the economy has shown continued momentum so far in 2025, bolstered by low unemployment and real wage gains; however, significant policy uncertainty is weighing on consumer and business confidence.
“Still, serving customers will remain retailers’ top priority no matter what the economic environment.”
According to other recent reports, consumer sentiment has dropped to a two-year low, and consumer confidence has dropped to a 12-year low because of economic uncertainty.
However, Jack Kleinhenz, chief economist of NRF, emphasized that consumer spending will not drop immediately due to increased anxiety over tariffs.
Kleinhenz added: “While we do expect slower growth, consumer fundamentals remain intact, supported by low unemployment, slower but steady income growth, and solid household finances. Consumer spending is not unraveling.”
Additionally, the non-store and online sales for retailers are projected to increase by between 7% and 9% to a total of $1.57 trillion to $1.6 trillion.
This figure is an increase compared to an 8.1% year-over-year rise to $1.47 trillion in 2024.
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