2025 will be a good year for the nation’s retailers, but perhaps not as good as last year. That’s according to the new forecast released Wednesday, April 2, by the National Retail Federation (NRF).
The NRF says retail sales this year will grow between 2.7% and 3.7% to between $5.42 trillion and $5.48 trillion. This compares to the 3.6% retail growth we experienced in 2024.
Online and other non-store sales (which are included in the total) are expected to grow between 7% and 9% to between $1.57 trillion and $1.6 trillion. Last year, these sales rose 8.1% to $1.47 trillion.
The announcement came during the NRF’s fifth annual State of Retail & the Consumer virtual event on the health of American consumers and the retail industry. At the event, NRF President and CEO Matthew Shay said, “Overall, the economy has shown continued momentum so far in 2025—bolstered by low unemployment and real wage gains—however, significant policy uncertainty is weighing on consumer and business confidence.”
NRF Chief Economist Jack Kleinhenz added, “A lot is riding on the consumer. While we do expect slower growth, consumer fundamentals remain intact, supported by low unemployment, slower but steady income growth, and solid household finances. Consumer spending is not unraveling.”
I’d add a “yet” to that statement. Kleinhenz pointed out, “Even though consumer confidence is declining, due largely to lingering inflation and consumers’ anxiety over tariffs, that doesn’t mean there will be an immediate drop in consumer spending.”
I am not an economist, but I am a consumer. Given the increase in tariffs just announced by President Trump, prices of consumer goods are going to increase by a lot—and quickly. Kleinhenz says, “It’s the hard data on employment, income, and tariff-induced inflation—not consumer sentiment—that supports our view of a slower trajectory for consumer spending.”
During the event, small business owner Sarah Wells, the CEO of Sarah Wells Bags, said increased tariffs will impact her business and “will ultimately cause many small businesses to close.”
The NRF expects GDP growth to slow to “just below 2%,” down from 2.8% in 2024 and “below the trend of the past few years.”
Adding to those concerns, Mark Zandi, the Chief Economist at Moody’s Analytics, is worried about a coming recession. He posted this on Twitter (I will never call it X) on March 30, “I’m raising my odds that a recession will begin sometime this year to 40%…Last week’s economic data were disconcerting, including the slide in consumer confidence, punk consumer spending, and persistently high inflation…With the announcement of big tariff increases on vehicle imports and the coming reciprocal tariffs, things are sure to get worse. Recession remains less likely than not only because layoffs remain low and job and income growth positive.”
After the announcement of the actual tariffs, Zandi told News Nation that the odds of a recession are even higher and that if what was announced is implemented, “I don’t see how we avoid recession…I really don’t.”
Chart courtesy NRF
Rieva Lesonsky is President of Small Business Currents, LLC, a content company focusing on small businesses and entrepreneurship. While you can still find her on Twitter @Rieva, you can also reach her @Rieva.bsky.social and LinkedIn. Or email her at Rieva@SmallBusinessCurrents.com.
