Table of Contents
CHICAGO – U.S. retail spending held firm in February despite week-to-week fluctuations driven by economic uncertainty, according to the leading consumer behavior analytics firm Circana. Over the four weeks ending March 1, 2025, overall retail sales demand remained flat compared to the same period last year, registering a modest 1% increase in dollar growth. However, underlying shifts in consumer behavior indicate emerging disruptions across discretionary and nondiscretionary spending categories.
“The paralyzing effects of economic uncertainty are starting to show up in short-term interruptions in discretionary consumer spending,” said Marshal Cohen, chief retail industry advisor at Circana. “On top of the existing concerns around inflation and the cost of goods, consumers are being inundated by headwinds that are creating pockets of behavior changes that have yet to impact the big picture.”
Recent trends indicate that certain consumer segments are adjusting their purchasing habits more dramatically. Circana’s Five in ’25 retail and consumer predictions identified U.S. Hispanic consumers as a group experiencing notable spending shifts, with a sharper decline in retail activity in January compared to the general population. Additionally, households earning less than $50,000 have been hit hardest by elevated prices, reflecting a 12% drop in spending during the same month. Rural consumers are also adjusting their shopping behaviors, contributing to the evolving retail landscape.
Even traditionally resilient demographics are beginning to pull back. Spending is slowing among consumers aged 55 and older and those in higher income brackets—groups that have been key drivers of retail growth in recent years. These shifts are expected to create fragility in discretionary spending before affecting the retail sector more broadly.
Retailers and manufacturers face an increasingly complex landscape, influenced by factors including inflation, tariffs, weather conditions, and political developments. Cohen warns that these forces could create a “perfect storm” for retail.
“The long list of change factors currently at play, from inflation and tariffs to weather and politics, are creating the potential for a perfect storm at retail, and the consumer is at the center of it all,” added Cohen. “In order to weather this storm, every retailer and manufacturer must remain aware of the activity both inside and outside their product and consumer sweet spots, and be prepared to make adjustments that will both calm and compel the consumer.”
