Depending on where you look, February’s retail results are a confusing mixed bag – up 0.2% on a seasonally-adjusted basis from January and up 3.1% seasonally-adjusted from February 2024 or down 0.9% year-over-year and off 4% month-to-month unadjusted, according to the Census Bureau – illustrating just how hard it is to get the actual picture of what’s going on in retail.
NEW YORK, NY - MARCH 12: Customers shop at a supermarket on March 12, 2025 in New York City. U.S. ... [+]
Unadjusted the retail and the food services industry generated $639.1 billion in February 2025, as compared with $644.8 billion last year.
On a seasonally-adjusted basis, February 2025 retail sales reached $722.7 billion compared with $700.9 billion last year.
Unadjusted, the biggest declines came in automobiles, the largest retail category at $125.4 billion in February and off about 1%, food services and drinking places down 2% to $87.3 billion, gasoline stations retreated 4% to $45.3 billion, building materials were off nearly 6% to $31.9 billion and clothing stores dropped 3% to $21.3 billion.
Bright spots were reported in non-store retail, the second largest segment, which rose nearly 2% to $111.2 billion, health and personal care stores, up over 2% to $34.5 billion, and furniture and home furnishing stores rising nearly 2% to $10.5 billion.
Food & beverage stores were basically flat as were general merchandisers, $77.1 billion and $67.3 billion respectively.
The Census Bureau’s reporting emphasizes month-over-month seasonally-adjusted estimates which take into account holiday and trading-day differences. But that clouds an already cloudy picture of the non-linear retail and food service trade that doesn’t and can’t be expected to rise month-over-month. Holidays profoundly impact consumer retail spending, thus the industry’s emphasis on Nov.-Dec. retail spending. Seasonal adjustments also obscure retailers’ experience on the ground.
Last year was a Leap Year, adding an extra day to February. On an average trading day in February 2024, the retail and food services industry generated $22.2 billion in revenue. By comparison, in February 2025, retail generated an average of $22.8 billion each day, meaning consumers spent nearly 3% more each day this year than last, about in line with inflation.
$83.6 billion – the difference between the Census Bureau’s seasonally-adjusted February 2025 retail estimates and unadjusted retail numbers.
“It’s just so stupid to be using ‘seasonally adjusted’ month-over-month numbers. The first thing they teach you in General Accounting is the difference between cyclical and non-cyclical businesses. So why the Census Bureau (and now the National Retail Federation) are using these numbers is utterly beyond me. What! February sales are less than January and December? Shocked, I tell you…I’m shocked,” shared Paula Rosenblum, co-founder and managing partner at RSR Research serving the retail industry.
The University of Michigan reported that consumer sentiment dropped to 57.9 points in mid-March from 67.8 the first week in February, as consumer inflation angst rose and concerns mounted about how the Trump administration tariffs and its fluctuating economic policies will affect their spending power. While the National Retail Federation reported lower-than-expected consumer spending in the first two months this year, NRF chief economist Jack Kleinhenz said that consumer fundamentals remain healthy “so far” and reassured the industry that American shoppers will continue to spend “as long as unemployment remains low and job growth continues.” This according to a media press release received today.
Easter comes a month later this year, on Sunday, Apr. 20 versus Mar. 31 in 2024. Last year, the NRF expected Americans to spend $22.4 billion around the holiday. It has yet to release its Easter spending forecast for 2025. However, being later in the season, apparel retailers might get an extra boost in sales of spring/summer fashions, something consumers might not have been ready for last year. Likewise, home and general merchandise retailers may get a lift too in outdoor and other seasonal merchandise.
Consumer Sentiment Tanks as Americans Expect More Pain Ahead (Wall Street Journal, 3/14/2025)
CNBC/NRF Retail Monitor Shows February Sales Were Down Monthly Amid Tariff Concerns (NRF press release, 3/10/2025)