The retail industry experienced significant volatility in 2025, as elevated inflation, a weakening labor market, rising household debt, and intensifying competition contributed to uneven retail sales throughout the year.
Looking ahead, the outlook for 2026 remains mixed. Lower borrowing costs may provide some relief to households, but persistent inflationary pressures and a weak labor market are expected to continue to shape the retail environment.
Sales Volatility in 2025
Retail sales started 2025 on a weak footing, falling 0.9 percent in January from the prior month and remaining flat in February, according to Trading Economics. Sales rebounded sharply in March, then declined again in April, followed by gains over the next four months, underscoring a volatile monthly pattern throughout the year.
Panos Mourdoukoutas
Author
Panos Mourdoukoutas is a professor of economics at Long Island University in New York City. He also teaches security analysis at Columbia University. He’s been published in professional journals and magazines, including Forbes, Investopedia, Barron's, IBT, and Journal of Financial Research. He’s also the author of many books, including “Business Strategy in a Semiglobal Economy” and “China's Challenge.”
