NRF: Tax refunds help lift retail sales 6.59% in March

Retail sales rose 6.59% in March from a year ago, as consumers received larger-than-usual state and federal tax refunds that offset higher gasoline prices, according to the National Retail Federation’s (NRF) Retail Monitor.

The NRF reports total retail sales are up 6.18% for the first quarter of 2026, and core sales rose 6.14% from the same period in 2025.

“Retail sales grew for a sixth consecutive month in March as the first wave of tax refunds offset higher gas prices resulting from the conflict in the Middle East,” NRF President and CEO Matthew Shay said. “Despite record-low consumer sentiment and the highest inflation rate in two years, consumers continued to spend on household priorities. As consumers focus on costs, retailers remain laser-focused on keeping prices competitive and affordable.”

While total sales, excluding restaurants, increased by more than 6% year over year, core retail sales, which also exclude auto dealers and gas stations, rose 7.05% from a year ago. Retail sales are not adjusted for inflation which remains elevated at 3.3% in March, according to the all-items consumer price index (CPI) reported by the U.S. Bureau of Labor Statistics (BLS).

Economists remain somewhat bullish on consumers who have been able to withstand the majority of the costs associated with tariffs, according to a report from Tarriffscotus.com. The report found Americans are paying about 96% of the cost of the tariffs that have since been ruled unconstitutional. Still, tariffs will continue at a likely lower rate for the foreseeable future as President Donald Trump attempts to retain parts of his tariff push.

Analysis from the Joint Economic Committee estimates the average American family paid more than $1,700 in tariff costs last year. Also, the Yale Budget Lab found that tariffs have raised consumer prices between 0.5% and 1%, and up to more than half of the costs are passed on to consumers. Economic growth did slow in the back half of 2025 with less job creation overall, the report states.

On Tuesday (April 14), Numerator reported its consumer sentiment tracker sent mixed messages. The confidence marker declined slightly in March based on caution regarding job confidence and discretionary spending. Roughly half of the survey respondents said their household finances were good. Four in 10 said they are somewhat comfortable spending money on discretionary items. One-third are opting to save extra money instead of spending it. Numerator also reports that 13% said they have no extra money to spend or save.

NRF said retail sales were up in eight of nine categories it tracks during March. Grocery and beverage sales were up 3.78% year over year, and food inflation averaged 2.7% higher than a year ago.

Health and personal care sales were up 12.25% year over year, fueled in part by a 2.2% inflation rate reported for the category. Clothing and accessories sales were up 10.89% year over year, led by women’s dresses, costing 10.2% higher than a year ago. Overall, apparel inflation was up 3.4% in March from a year ago, according to BLS data.

Sporting goods, hobby, music and book sales were up 10.88% from a year ago. BLS reports sporting goods prices rose 4.5% in March last year, while music and accessories prices increased 5.5%. Digital products, such as electronic books and games, were up 9.39% in March from a year ago.

General merchandise sales increased 8.77% year over year. Inflation in this broad category indicated that tools and hardware costs increased 8% from a year ago, and toy prices rose 2.3% from March 2025.

Electronics and appliance sales increased 7.67% year over year, but costs in the categories were mixed. Calculators and consumer electronics prices, including smartphones, declined 12.8% in March, and appliance prices were up 1.1% overall from a year ago. Furniture and home furnishings sales rose 3.54%. Building and garden supply sales were down 0.47%.