- Retail sales rose 4.3% year-over-year in July, fueled by promotional events, early school shopping, and Fourth of July spending.
- Despite topline gains, actual volume growth was just 1.4%, signaling consumer hesitation beneath the surface.
- Home and apparel retailers led category growth, while electronics and home improvement lagged—mirroring foot traffic trends.
- Experience-based retail softened, though average dwell times remained high, reflecting selective but engaged consumer participation.
Retail Rides High In July—But Softness Lingers
July retail sales climbed 4.3% YoY, with core retail growing even faster at 4.7%, reports Colliers. Driving the uptick were Amazon Prime Day deals, early back-to-school shopping, and July 4th spending. Yet the real story lies beneath: volume growth was just 1.4%, with $6.2B attributed to pull-forward spending—indicating that shoppers are cautious and value-driven.
Home And Apparel Get A Promotional Boost
Furniture and home furnishing retailers posted a 5.8% sales increase in July, while apparel stores were up 7.4%. Promotions clearly worked—yet foot traffic was more reserved. Furniture visits rose 2.75%, and clothing store visits increased 3.93%, suggesting consumers are engaging, but carefully.
Hobby Lobby was the top-performing chain in July with a 15.6% year-over-year increase. Staples followed closely, up 14.6%, while Ollie’s Bargain Outlet posted an 11.2% gain. The strong performance of these retailers highlights ongoing demand for crafts, office supplies, and discount goods.
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Electronics And Home Improvement Falter
Despite promotional events, electronics and home improvement categories underperformed. Both saw sales declines in July, and foot traffic reflected the trend: electronics visits were down 1.23%, and home improvement dipped 0.35%. Consumers appear reluctant to invest in big-ticket discretionary items amid economic uncertainty.
Experience Retail Cools—But Engagement Holds
Entertainment categories weren’t spared. Foot traffic to theaters and music venues dropped 5.82% YoY, and restaurants saw only a 0.23% rise in visits. Still, dwell times remained elevated—averaging nearly 146 minutes for theaters—suggesting that those who did go out, stayed engaged.
Fitness, however, was a bright spot. The category saw a 7.38% increase in visits, highlighting wellness as a continuing consumer priority.
Why it matters
Retailers are riding a promotional high, but the underlying indicators—muted traffic, soft volume growth, and uneven category performance—signal a cautious consumer environment. Bargain hunting is back in focus, and value-based spending continues to define 2025’s retail landscape.
What’s next
As the back-to-school season unfolds and retailers gear up for Q4, all eyes will be on consumer sentiment and spending resilience. Categories like discount retail, fitness, and essentials are likely to remain strongholds, while discretionary sectors may need more aggressive strategies to lure cautious shoppers.
