What: US retail sales continued to grow in September despite consumer concerns over high prices and job security.
Why it is important: The ability of retailers to sustain sales highlights adaptive strategies and the importance of upper-income shoppers.
US retail sales showed continued growth in September, even as consumers faced persistent inflation and growing anxiety about job security. While high prices are weighing on shoppers, spending has not significantly declined, with upper-income consumers driving much of the discretionary purchasing thanks to gains from the stock market. Major retailers such as Walmart and Gap reported strong quarterly sales, successfully targeting wealthier customers, while others like Home Depot noted a slowdown in big-ticket purchases and home improvement projects. The broader economic context remains uncertain, with labour market softness and cautious hiring trends, but the resilience in retail demand has helped support economic growth through the third quarter. As the sector heads into the critical Black Friday period, the interplay between inflation, consumer sentiment, and retailer adaptation will be crucial in shaping outcomes. The ongoing shift toward value-consciousness and digital engagement continues to redefine the retail landscape, underscoring the importance of strategic agility for retailers navigating these challenges.
IADS Notes: Throughout 2025, US retail sales have consistently outperformed expectations, with annual growth rates around 3.7% as noted in July and September (Visa, IADS Reports; Forbes, IADS News). This resilience has been driven by wage gains, early shopping behaviours, and the spending power of upper-income consumers. The 2024 holiday season saw a 4% year-over-year increase in sales, particularly through mobile and AI-driven channels (Liontree, IADS News), while department stores faced ongoing challenges, as highlighted in March and April 2025 (WWD, IADS News). These trends confirm that, despite mounting risks, the retail sector continues to adapt and find growth opportunities.

US retail sales are proving resilient while risks mount