NRF: 2025 retail sales to hit $5.42 trillion, despite economic uncertainty

The National Retail Federation (NRF)  forecast retail sales during 2025 will grow between 2.7% and 3.7% over 2024 to between $5.42 trillion and $5.48 trillion. The announcement was made during NRF’s fifth annual State of Retail & the Consumer virtual event on the health of American consumers and the retail industry.

“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,” said Matthew Shay, president and CEO, NRF. “Still, serving customers will remain retailers’ top priority no matter what the economic environment.”

The 2025 sales forecast compares with 3.6% annual sales growth of $5.29 trillion dollars in 2024. This year’s forecast is also in line with the 10-year pre-pandemic average annual sales growth of 3.6%.

Non-store and online sales, which are included in the total figure, are expected to grow between 7% and 9% year over year to a total of between $1.57 trillion to $1.6 trillion. By comparison, non-store and online sales grew 8.1% to a total of $1.47 trillion last year.

NRF expects GDP growth to decline just below 2% in 2025, down from 2.8% in 2024 and below the trend of the past few years.

“Any way you look at it, a lot is riding on the consumer,” said Jack Kleinhenz, chief economist, NRF. “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.”

Kleinhenz added, 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.

“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,” he said.

With the implementation of tariffs, NRF expects PCE inflation during 2025 to remain at the current level of about 2.5%. Overall, household balance sheets appear to be in good shape. Delinquencies on auto loans and credit card payments have risen but remain in line with the pre-pandemic trend. The consumer credit picture should remain healthy as long as the labor market remains solid.

As the leading authority and voice for the retail industry, NRF provides data on retail sales each month and also forecasts annual retail sales and spending for key periods such as the holiday season.

NRF’s calculation of retail sales excludes automobile dealers, gasoline stations and restaurants to focus on core retail. The 2025 retail sales forecast is based on economic modeling that considers a variety of indicators including employment, wages, disposable income, consumer credit and previous retail sales. NRF produces forecasts and other analyses using data from a range of U.S. government sources as well as the CNBC/NRF Retail Monitor, powered by Affinity Solutions.