As 2025 unfolds, the U.S. retail sector is navigating a complex landscape marked by modest growth expectations and significant investments in technology. In 2024, the retail industry achieved sales of $5.28 trillion, reflecting a 3.6% increase from the previous year, while inflation settled at 2.9% [922e02a9]. Jack Kleinhenz, the chief economist for the National Retail Federation (NRF), forecasts promising economic growth for 2025, despite potential challenges posed by trade and tax policies [922e02a9].
Retail analysts from Colliers report that 56.7% of apparel retailers anticipate modest growth, while grocery retailers are notably more optimistic, with 87.5% expecting positive outcomes [922e02a9]. However, concerns regarding tariffs on imports, particularly those imposed by former President Trump, are dampening optimism among retailers reliant on imported goods. Walmart's CFO, John David Rainey, highlighted that approximately two-thirds of Walmart's merchandise is U.S.-made, which provides a buffer against these tariffs [922e02a9].
In response to the evolving market conditions, retailers are significantly investing in technology. A staggering 88.1% plan to enhance warehouse automation, while 87.3% are focusing on developing omnichannel capabilities to better serve consumers [922e02a9]. Despite inflationary pressures, consumer spending is expected to shift slightly downward in 2025, with 60% of consumers indicating they will increase their grocery expenditures while being more budget-conscious overall [922e02a9].
In light of the political landscape, the NRF has outlined key policy priorities for 2025, particularly with the Republican party controlling both chambers of Congress following President Trump's re-election. The NRF emphasizes enhancing American competitiveness and job creation, advocating for the extension of tax provisions from the 2017 Tax Cuts and Jobs Act, and maintaining the 21% corporate tax rate [2879ffc6].
Trade strategy remains a focal point, with the NRF opposing proposed tariffs on consumer goods that could cost consumers between $46 billion to $78 billion annually. Additionally, credit card swipe fees, which totaled over $173 billion in 2023, are a concern, costing families an average of $1,100 a year. The NRF supports the Credit Card Competition Act, which aims to reduce swipe fees by $16 billion annually [2879ffc6].
Organized retail crime is also a rising concern, prompting 28 states to enact laws against it. The NRF advocates for the Combating Organized Retail Crime Act to enhance law enforcement resources [2879ffc6]. As retailers prepare for the new year, the lessons learned from 2024 will be crucial in adapting to the evolving market landscape and effectively meeting consumer demands. The focus on technology investment and strategic planning will be essential for navigating the challenges ahead in 2025 [922e02a9].