Total retail sales see first decline since February
By Jonathan Silver, CEO of Affinity Solutions
Retail sales sprang forward this spring, but June’s numbers point to a summer slowdown driven by shifting consumer sentiment. After steady gains earlier in the year, total retail sales saw their first monthly dip since February. While the pullback reflects growing caution amid ongoing concerns about tariffs and economic uncertainty, it also suggests consumers are being more selective—not retreating altogether. As confidence stabilizes, there’s still room for growth in the second half of the year.
According to the CNBC/NRF Retail Monitor, powered by Affinity Solutions, total retail sales (excluding auto and gas) dipped by -0.33% month-over-month (MoM) in June, and core retail sales—which further excludes restaurants—declined -0.32% MoM. Most retail categories experienced slight declines month-over-month, with discretionary and higher-ticket items taking the biggest hit.
This slight slowdown follows modest growth in May and stronger gains in April, presenting a nuanced picture of consumer behavior. Year-over-year (YoY) figures show retail spending remained strong, with total sales up 3.19% YoY and core retail rising 3.36% YoY. These figures suggest consumers are recalibrating their spending in response to inflation, tariffs, and other economic pressures — prioritizing essentials while adjusting discretionary purchases.
Understanding performance across key categories isn’t just about tracking trends. It’s about identifying where demand is heating up or cooling down, where value matters most, and how to adjust messaging and media strategies to meet consumers where they are. Let’s take a closer look at the June figures.
Pricey Purchases Still on Pause
Sales in durable categories like Electronics, Appliances, and Building Supplies remained soft in June, though the rate of decline generally eased MoM. Compared to a sharper drop in May (-1.98% MoM), Electronics & Appliances saw a smaller decline in June (-1.03% MoM). Building & Garden Supplies followed a similar trend, down only -0.76% MoM in June compared to -2.30% MoM in May. In contrast, Furniture & Home Furnishings saw a deeper decline in June, down -1.04% compared to a -0.24% MoM drop in May. These mixed results suggest that while some categories may be stabilizing, others continue to face headwinds.
Yearly figures tell a similarly complex picture. Building & Garden Supplies declined less in June (-5.33% YoY) than in May (-7.31% YoY). Furniture & Home Furnishings declined YoY in both June (-1.14%) and May (-0.10%), with June seeing sharper declines. Alternatively, Electronics & Appliances grew 2.43% in June (YoY), although growth YOY in May was slightly stronger (2.58% YoY).
These shifts may be indicative of a broader trend: consumers remain cautious amid uncertainty around trade policies, inflation, and a volatile housing market marked by a slowing pace of nationwide price increases, a rise in available inventory in some areas, and persistent affordability challenges for many potential buyers. This means spending will most likely continue to fluctuate across durable categories.
Essentials Remain Essential
Traditionally strong categories such as Grocery & Beverage and Health & Personal Care saw slight monthly declines in June, though yearly figures suggest ongoing strength in essential spending.
Grocery & Beverage sales dipped -0.13% MoM but climbed 2.59% above last year. Health & Personal Care fell -0.31% MoM but rose 3.47% YoY.
These figures suggest that while spending may be normalizing month to month, consumers continue to prioritize essential goods, reinforcing the resilience of everyday categories. For brands, this signals a need to focus not just on presence, but on relevance—delivering value, trust, and utility in moments that matter most.
According to Kantar’s latest BrandZ report, major retailers, including Walmart, Costco, and Sam’s Club have seen strong growth throughout 2025. By focusing on efficiency, pricing, and value in a high-inflation environment, they are successfully navigating economic uncertainty.
Selective Spending Summer
In more lifestyle-driven categories like Clothing & Accessories, Sporting Goods, Hobby, Music & Book Stores, and General Merchandise, spending continues to show strength compared to last year, though early signs of slowing demand are beginning to surface. Clothing & Accessories, for example, saw a modest decline of -0.22% MoM in June—down from May’s growth—but maintained a 2.71% YoY increase.
Sporting Goods, Hobby, Music, & Book Stores fell a slight -0.13% MoM but jumped 8.52% YoY, suggesting that spending in leisure categories remains a priority for many households, even as overall discretionary behavior became more cautious.
Additionally, General Merchandise stores—which tend to attract shoppers with their one-stop convenience and competitive pricing—saw a slight -0.15% MoM decline. Still, a 3.18% YoY increase indicates that these retailers continue to be a go-to destination for consumers prioritizing value and efficiency.
Despite these yearly gains, the month-over-month declines could signal growing caution in categories that typically benefit from summer activity. As more Americans delay or scale back travel plans due to economic uncertainty, the ripple effects may most acutely impact discretionary retail, particularly in categories tied to seasonal recreation, apparel, and leisure.
Looking Ahead: Consumer Confidence at a Crossroads
Year to date (January to June), total retail sales are up 4.66%, and core retail sales are up 4.93% – a sign that consumers are still spending even amid uncertainty.
June’s modest pullback doesn’t signal a collapse, as total retail sales were up 3.19% YoY and core retail rose 3.36% YoY. But it does point to shifting consumer behavior in response to ongoing economic pressures. Households are navigating rising inflation (2.7% YoY in June), tariff uncertainty, and broader cost-of-living concerns, which may be prompting more selective spending rather than an outright slowdown.
For retailers, agility is essential. As spending patterns evolve, those who can respond quickly to changes in price sensitivity, promotional timing, and inventory management will be best positioned to capture dollars in the second half of the year.
With back-to-school season underway and the holidays on the horizon, June’s pause may prove to be temporary. But the road ahead will require careful navigation– and a deep understanding of what consumers truly value.
