US retail sector shows resilience amid inflation & tariff headwinds

General merchandise sales are down 1 per cent year-to-date, reflecting cautious consumer sentiment. Circana attributed the mixed performance to a blend of economic headwinds and supportive tailwinds, notably the ‘soft comps’ from last year, when election-related distractions caused a sharp 9 per cent decline in sales during late October and early November, according to Marshal Cohen, chief retail advisor of Circana in an article titled, ‘Retail’s Resilience: Navigating Inflation & Holiday Spending’.

Cohen introduced the term ‘invisible inflation’ to describe how consumers, though aware of higher prices, continue to spend by adapting their habits—trading down, buying fewer items, or seeking deals. This adaptation, he said, has delayed the full impact of inflation on retail performance, which may not be fully felt until 2026.

As the holiday season approaches, consumer resilience and the search for value are expected to drive moderate but steady sales growth. Cohen emphasised that while inflationary pressures persist, promotions and discounts will play a crucial role in sustaining demand through year-end.

Fibre2Fashion News Desk (SG)