Retail sales rise 6.7% in April, tariff impacts noted

Consumer spending rose in April ahead of expected tariff impacts. The National Retail Federation (NRF) Retail Monitor had April sales, excluding gasoline and automobiles, up 0.72% from the prior month and 6.7% higher than a year ago.

The Retail Monitor report is compiled by Affinity Solutions and tracks actual debit and credit card transactions among thousands of retailers. It does not need to be updated as survey data compiled by the U.S. Census Bureau does.

Threatened and implemented tariffs, especially on China, by the Trump Administration have created problems with many consumer products in the global supply chain. West Coast port volumes have declined as much as 40% since tariffs were announced, according to research from investment and banking firm TD Cowen.

“The April gains were driven largely by consumers continuing to pull purchases forward to stay ahead of tariffs that will inevitably lead to higher prices,” NRF President and CEO Matthew Shay said. “Despite declines in confidence caused by the economic uncertainty that has come with tariffs, consumer fundamentals remain intact, supported by low unemployment, slower-but-steady income growth and solid household finances. Consumers maintain their ability to spend and have strong reasons to spend now before tariffs can drive up prices or cause shortages on store shelves.”

Core retail sales that also excluded restaurants jumped 7.11% year over year, better than gains of 5.07% in March. NRF reports total sales were up 5.08% year over year for the first four months of the year, and core sales were up 5.5%.

Another factor likely boosting April sales is that Easter fell during the month, compared to March a year ago. Easter sales were predicted to be $23.6 billion, up 5% from the prior year. NRF said April sales growth was positive in most of the nine categories it tracks on a monthly and annual basis.

Digital sales rose 27.6% from a year ago, and were up fractionally from the prior month. With tariffs expected on electronics and appliances, sales in those categories spiked 10.5% from a year ago. Sales were up 2.8% from the prior month.

Grocery is a category not as impacted by tariffs and are largely deemed non-discretionary. Sales at grocery and beverage stores rose 9.51% in April from a year ago, and sales were up 0.59% month-over-month.

Sporting goods, hobby, music and book sales were up 9.19% from a year ago. Again sporting goods and crafting items are largely imported. Sales were up 0.81% month over month, according to the NRF.

Health and beauty, which include cosmetics sales, also are imported. Sales rose 8.51% from the prior year and 1.43% from the prior month. Sephora execs have said they plan to pass along the entire cost of the tariffs with prices rising as much as 25%.

General merchandise sales, a broad category that includes many dollar store items, were up 6.67% year over year, but slightly lower than the prior month. Dollar Tree execs have said they are preparing for potential tariff impacts by negotiating with suppliers, considering changes to product specifications and sizes, and shifting manufacturing to countries with no or lower tariffs.

Clothing and accessories are likely to be greatly impacted by tariffs, as 97% of clothing sold in the U.S. is imported, according to eMarketer. Most of the clothing comes from China and Vietnam. Sales of apparel and accessories climbed 5.14% in April from a year ago and also increased 1.14% from the prior month. Budget Lab estimates apparel prices will rise 8% as a result of reciprocal tariffs when they go into effect. Overall, prices could increase 17% considering all the proposed duties.

Furniture and home furnishings are another area likely to be hit by tariffs. Strategic Insights surveyed 420 home furnishing retailers about the tariffs and found that 70% expect tariffs to be problematic over the next six months. Four in ten said they would have to raise prices between 11% and 20% to cover rising costs. While the categories are largely seen as discretionary, analysts expect consumers to avoid purchases amid rising prices. NRF reports home furnishings and furniture sales were flat against sales in March and year over year.

Building supplies and gardening sales were down from a year ago in April by 2.1%. While April is deemed to be planting season, the category is also discretionary and consumers may be hesitant to spend on products in the category, according to industry analysts.