The 2025 retail sales forecast from the National Retail Federation projects a climb between 2.7% and 3.7% over 2024, totaling between $5.42 trillion and $5.48 trillion. Despite a tense economic climate, the NRF expects consumers to keep spending—at a slightly slower pace.
The forecast was unveiled during the NRF’s fifth annual State of Retail & the Consumer virtual event. Speakers focused on inflation, tariffs, and American consumers’ resilience.
Retail Industry Holds Steady
NRF Chief Economist Jack Kleinhenz emphasized that current retail momentum is built on hard numbers—not soft consumer sentiment.
“Even with waning confidence, we don’t foresee a sharp decline in spending,” Kleinhenz said. “Employment, wage growth, and tariff-driven inflation matter more than mood.”
The NRF expects the core inflation rate, measured by the Personal Consumption Expenditures index, to hover around 2.5% in 2025—mainly due to recently imposed tariffs.
Household balance sheets remain primarily stable. Although auto loan and credit card delinquencies have ticked up, they align with pre-pandemic levels.
Tariffs Could Threaten Consumer Costs
The Trump administration’s new tariffs will likely increase import costs, which retailers say will fall squarely on American consumers.
“More tariffs equal more anxiety and uncertainty,” said David French, NRF’s executive vice president of government relations. “They act as a hidden tax on families, especially in rural and working-class communities.”
French warned that small retailers and vulnerable communities will bear the brunt of these added costs. A recent NRF poll found that 88% of voters view small businesses as essential to their local economy, making tariff impacts even more significant.
“Tariffs aren’t paid by foreign governments,” French said. “They’re absorbed by U.S. businesses and passed on to consumers.”
Related Article: Trump’s New Tariffs Threaten Global Trade
Digital Retail Sales Drive Growth
Non-store and online sales are projected to rise by 7% to 9% in 2025, totaling between $1.57 trillion and $1.6 trillion. This segment includes e-commerce and remote purchasing, which continue to outpace brick-and-mortar sales.
In 2024, online and non-store sales grew 8.1% to $1.47 trillion.
This shift highlights consumer demand for flexibility and convenience, especially as inflationary pressure and interest rates limit discretionary spending.
GDP and Confidence Lag Behind Retail Growth
While the 2025 retail sales forecast shows healthy top-line numbers, broader economic indicators suggest a slowdown. NRF expects gross domestic product growth to slip below 2%, down from 2.8% in 2024.
“The economy is still moving forward,” NRF President and CEO Matthew Shay said. “But policy uncertainty is shaking business and consumer confidence. Regardless, retailers remain focused on serving customers.”
The projected growth aligns with the 10-year pre-pandemic average of 3.6%, indicating stability in consumer activity—even under stress.
Labor Market Remains Key
According to Kleinhenz, the labor market remains the bedrock of consumer health. “Low unemployment and steady income gains continue to support retail spending,” he said. “The fundamentals are still solid.”
NRF believes household consumption will stay afloat despite slower GDP and climbing costs as long as job growth is maintained.
“Spending isn’t unraveling,” Kleinhenz noted. “It’s simply shifting into a lower gear.”