US Retail Sales Projected to Grow Up to 3.7% in 2025, Says NRF

The National Retail Federation (NRF) has forecasted that US retail sales will grow between 2.7% and 3.7% in 2025, reaching a total of $5.42 trillion to $5.48 trillion. This projection follows a 3.6% growth in 2024, with retail sales totaling $5.29 trillion. The expected growth for 2025 is in line with the pre-pandemic 10-year average annual sales growth rate of 3.6%, signaling a steady expansion in the retail sector.

A significant portion of the growth is expected to come from online and non-store sales, which are forecasted to increase by 7% to 9% year-over-year, reaching between $1.57 trillion and $1.6 trillion in 2025. This follows an 8.1% increase in 2024, when online and non-store sales amounted to $1.47 trillion. The growth of online sales continues to be a major trend in the retail industry, reflecting the ongoing shift toward digital shopping.

Despite this optimistic retail forecast, the broader U.S. economy is expected to experience a slowdown in GDP growth, with projections placing it just below 2% in 2025, down from 2.8% in 2024. While the economy has shown positive momentum, fueled by low unemployment and real wage gains, significant policy uncertainty is impacting consumer and business confidence. NRF President and CEO Matthew Shay emphasized that retailers will continue to prioritize customer service, regardless of the economic environment.

The NRF also expects PCE (Personal Consumption Expenditures) inflation to remain stable at around 2.5% in 2025, even with the potential impact of tariffs. Overall, household balance sheets are in good shape, and the consumer credit outlook remains healthy, as long as the labor market remains strong.

NRF’s retail sales projections exclude automobile dealers, petrol stations, and restaurants, focusing on core retail activity. NRF Chief Economist Jack Kleinhenz acknowledged that while growth is expected to slow, consumer fundamentals remain strong, supported by steady income growth, low unemployment, and healthy household finances. This solid financial footing is expected to sustain consumer spending, even as growth slows.