NRF: Retail sales rose 3.38% in February from a year ago

Retail spending declined in February, but retail sales were up compared with the same period in 2024 as the economy remained strong, according to the National Retail Federation (NRF) Retail Monitor report released Monday (March 10).

“Consumer spending dipped slightly again in February due to the combination of harsh winter weather and declining consumer confidence driven by tariffs, concerns about rising unemployment, and policy uncertainty,” said NRF President and CEO Matthew Shay. “Unease about the probability of inflation and paying higher prices for nondiscretionary goods has the value-conscious consumer spending less and saving more. But for the moment, year-over-year gains reflect an economy with strong fundamentals.”

The trade group reports total retail sales in February, excluding automobiles and gasoline, were down 0.22% from the prior month, but up 3.38% year over year. Total sales were up 4.41% year over year for the first two months of the year.

Core retail sales, which also exclude restaurants, were down 0.22% from the prior month, but up 4.11% annually, the trade group reported. Core sales rose 4.91% in the first two months of this year.

NRF said the monthly downturn in February came on the heels of the Trump administration’s announcement of 10% tariffs on goods from China and 25% on goods from Canada and Mexico. The Canada-Mexico tariffs were immediately delayed by a month, then recently delayed again for most goods until April 2, but the tariffs on China were doubled to 20%.

NRF Chief Economist Jack Kleinhenz said tariff concerns are weighing on consumer sentiment. The University of Michigan’s Index of Consumer Sentiment dropped to 64.7 in February from 71.7 in January, marking the second monthly decline after five months of small gains. The U.S. Census Bureau will report its survey-based retail sales report on March 17.

The Retail Monitor report uses actual credit and debit card purchase data compiled by Affinity Solutions and does not need to be revised.

A slowdown in consumer spending was recently forecast by Walmart execs in the retail giant’s recent more-cautious earnings guidance. That same sentiment was shared by other big retailers.

The Retail Monitor indicated February sales were up in six out of nine categories on an annual basis. Growth was led by online as well as health and personal care. Following are the category sales numbers:
• Online and other non-store sales, up 36.51%
• Health and personal care sales, up 8.33%
• General merchandise sales, up 6.2%
• Grocery and beverage sales, up 4.08%
• Clothing and accessories sales, up 3.75%
• Sporting goods, hobby, music, and book sales, up 3.57%
• Electronics and appliance sales, down 0.06%.
• Building and garden supply sales, down 3.34%
• Furniture and home furnishings sales, down 3.67%