Staying on top of retail trends is crucial for independent businesses navigating economic shifts. The latest National Retail Federation (NRF) report, based on U.S. Census Bureau data, shows modest retail sales growth in February as consumers remain cautious amid inflation concerns and policy changes. While spending softened early this year, strong job growth and steady incomes indicate that consumer fundamentals remain stable.

For local businesses, understanding these trends can help with strategic planning, inventory management, and forecasting demand. Read on to see what the latest NRF report means for your business and how to prepare for the months ahead.

From the National Retail Federation.

WASHINGTON – Data released today by the U.S. Census Bureau showed modest month-over-month retail sales growth in February amid consumer worries over inflation and Washington policy decisions, National Retail Federation Chief Economist Jack Kleinhenz said.

“Lower-than-expected consumer spending in the first couple of months of the year likely reflected payback for very strong spending in the fourth quarter and weather-related events since then,” Kleinhenz said. “Moreover, these results show that households are apprehensive and carefully navigating lingering inflation and turmoil related to changing economic policies. Regardless of the softer spending, consumer fundamentals remain healthy and intact so far, supported by low unemployment, steady income growth and other household finances. American shoppers will likely continue to spend as long as unemployment remains low and job growth continues.”

The Census Bureau said overall retail sales in February were up 0.2% seasonally adjusted month over month and up 3.1% unadjusted year over year. That compared with a decrease of 1.2% month over month and an increase of 3.9% year over year in January.

February’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.9% seasonally adjusted month over month but down 0.2% unadjusted year over year because of the comparison against unusually high sales in February 2024. Core sales were down 1.2% year over year on a three-month moving average, also skewed by last February.

The results come after core retail sales grew 4.2% year over year during the 2024 holiday season and 3.6% for the full year.

Last week, the CNBC/NRF Retail Monitor, powered by Affinity Solutions, reported that core retail sales were down 0.22% seasonally adjusted month over month in February but up 4.11% unadjusted year over year. That compared with a decrease of 1.27% month over month and an increase of 5.72% year over year in January.

As the leading authority and voice for the retail industry, NRF provides data on retail sales each month and also forecasts annual retail sales and spending for key periods such as the holiday season each year.

About NRF
The National Retail Federation passionately advocates for the people, brands, policies and ideas that help retail succeed. From its headquarters in Washington, D.C., NRF empowers the industry that powers the economy. Retail is the nation’s largest private-sector employer, contributing $5.3 trillion to annual GDP and supporting more than one in four U.S. jobs — 55 million working Americans. For over a century, NRF has been a voice for every retailer and every retail job, educating, inspiring and communicating the powerful impact retail has on local communities and global economies. nrf.com