Tariff-Driven Spending Boosts Sales as Consumers Stock Up
By Jonathan Silver, CEO of Affinity Solutions
Forget April showers this year. April was dominated by a downpour of “will they or won’t they” headlines regarding impending tariffs. Yet despite this uncertainty, retail sales continued to grow as consumers made selective purchases in response to looming tariff concerns.
Following March’s gains, April retail sales showed even stronger momentum. According to the CNBC/NRF Retail Monitor, powered by Affinity Solutions, total retail sales grew 6.76% year-over-year (YoY) and 0.72% month-over-month (MoM), while core retail sales (excluding auto, gas, and restaurants) climbed 7.11% YoY and 0.90% MoM.
Despite declines in consumer confidence, strong labor market fundamentals, including low unemployment and slow-but-steady wage growth, kept spending resilient. Additionally, Easter falling in April this year, rather than in March, boosted YoY sales, with shopping over the holiday weekend contributing to gains.
Spending was up in 10 out of 12 categories, both month-over-month and year-over-year. While consumer spending in the next several months is far from predictable, unpacking the performance in some key categories will provide a sense of what’s ahead.
Early Buying Frenzy Drives Growth in Digital and Tech
As tariffs on imported goods loomed, Electronics & Appliances saw an impressive 10.5% YoY increase and 2.8% MoM growth, signaling that consumers were making larger ticket purchases ahead of anticipated price hikes on items like smartphones, gaming consoles, and home entertainment systems. Other potential factors were launches for new devices like the Samsung S25 Edge, OnePlus 13 Mini, and Nintendo Switch 2 (which saw strong demand for pre-orders), along with retailer promotions aimed at driving consumer interest.
We’ll be watching this category closely as some of the most restrictive tariffs could impact electronics and appliances. While things are in limbo, retailers should continue to stay the course and encourage consumers to pull purchases forward to take advantage of lower prices and avoid empty shelves if tariffs go into effect on these items.
Smart Snackers Feed Grocery Sales
Grocery & Beverage sales increased 9.51% YoY and 0.59% MoM, as households stocked up ahead of expected inflation. Many shoppers prioritized essential goods, taking advantage of bulk discounts and deals before price increases impacted their grocery bills. The Easter holiday (which fell in March last year) also contributed to the strong YoY increase in this category as families gathered to celebrate. While food prices, especially eggs, dipped slightly in April, shoppers remained cautious, aware that tariffs could result in higher costs in the coming months.
With so many brands and options in this category, retailers would be wise to build loyalty and consider the long-term impacts of raising prices too much or too soon. The short-term pain of maintaining stable prices, even with higher product costs, could lead to a long-term gain if that leads to greater customer loyalty and share of wallet.
Clothing Springs Forward
Like Grocery & Beverage, Clothing & Accessories posted 5.14% YoY growth and 1.14% MoM growth, with the combination of the Easter holiday and concerns about tariffs driving spend. In addition to the standard seasonal wardrobe refreshes, a recent NRF and Prosper Insights survey revealed that 49% of customers intended to purchase apparel over the Easter weekend.
Since as much as 97% of apparel sold in the U.S. is imported, according to eMarketer, the impact of tariffs on prices is inevitable. While clothing is considered an essential category, fashion tastes can change quickly, and retailers will have to make quick decisions in managing their inventory management as market dynamics shift. Continuous access to insights on consumer purchase behavior is key to understand how consumers are spending, so retailers can respond quickly and in the right way.
Plant Projects Now, Pricing Problems Later
Building & Garden Supplies saw a mixed performance, growing 2.77% MoM but declining 2.10% YoY. Spring typically drives demand for home improvement and landscaping products. Concerns over rising costs, though, may have led to reduced spending in the category.
Compared to strong year-over-year (YoY) increases in March (Lowe’s +6.6%, Home Depot +4.2%), April saw a downturn for big box home improvement retailers. Lowe’s sales fell by 3% YoY, while Home Depot’s growth slowed to just 0.7% YoY. This could be an indicator of a weak summer ahead for the home improvement retail market.
People were also cautious in their spending on upgrading their homes. Spending on Furniture & Home Furnishings in April increased 0.09% YoY and and 0.86% MoM, with with just a small rise in prices in this category.
Evolving Retail Strategies as Shoppers Pull Purchases Forward
Even with consumer confidence at a significant low, people spent in April, with 10 out of 12 categories growing compared to the previous year. This spending surge partially reflects consumers buying earlier to avoid potential future price increases and the impact of well-executed promotions and pricing strategies.
As Q2 progresses, retailers should be ready for rapidly shifting spending patterns. Access to near real-time consumer purchase data to understand the true impact of market dynamics is essential to staying ahead. Retailers should be prepared for a potential decrease in consumer spending later this year, as economists caution that tariffs could lead to inflation in the coming months. Although strong retail sales in April were fueled by consumers buying sooner, the full consequences of the tariff story may not become apparent until the summer. Businesses that grew their inventory before tariffs were in place might be able to avoid price increases initially, but the longer term impacts remain uncertain.
Though there are many factors we can’t control – like tariffs, interest rates, wage growth, consumer confidence, and more – businesses can still win by focusing on what they can control: how they respond to uncertainties through a real understanding of their customers’ via purchase behaviors. Retailers who can respond quickly to changing behavior will be best able to navigate changing consumer behaviors in the months ahead.
