- Retail sales grew 3.5% YoY in August, but volume growth was just 0.4%, showing inflation’s role in boosting topline numbers.
- Apparel sales surged 7.6%, outperforming most categories, though foot traffic lagged behind at just +4.66%.
- Home improvement spending fell sharply (-5.7%), while experience-based retail like theaters saw a 26.9% plunge in visits.
- Online shopping grew 8.2% YoY as cautious consumers prioritized convenience and price comparison.
Retail sales showed headline gains in August 2025. However, the latest report reveals that inflation continues to mask weak volume growth, per Colliers. Core retail (excluding foodservice, gas, and auto) rose 3.6% year-over-year, while total retail volumes inched up just 0.4%, pointing to consumer caution in a high-cost environment.
Apparel Keeps Climbing
Fashion retailers had a strong month. Apparel sales rose 7.6% YoY, driven more by higher average transaction values than foot traffic, which increased 4.66%. Retailers offering trend-forward, desirable inventory saw the biggest wins, reinforcing the value of curated assortments in today’s market.
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Home Categories Split
Home improvement took a significant hit, with sales down 5.7% and foot traffic dipping 0.4% as seasonal spending shifted priorities away from DIY projects. In contrast, furniture and home furnishings held steady with a modest 2.9% sales increase, helped by earlier buying ahead of potential tariffs.
Experience Retail Pulls Back
Consumer activity in entertainment categories sharply declined. Theaters and music venues experienced a massive 26.91% drop in foot traffic—the worst among all tracked segments. Despite this, dwell times remained high at over 132 minutes, suggesting strong engagement from fewer visitors. Restaurant visits were nearly flat, up just 0.29%.
Digital Convenience Wins
Online shopping saw an 8.2% jump in August, driven by fewer in-store promotions and a consumer base focused on comparing prices and avoiding crowds. The shift underscores the growing challenge for brick-and-mortar retailers in competing with e-commerce’s convenience advantage.
Top Performers
Adidas, Michaels, and Goodwill led in foot traffic growth among national retail chains, with YoY increases of 13.6%, 13.3%, and 11.7% respectively. Other strong performers included GameStop, Ross Dress for Less, and Athleta. Each brand benefited from targeted product offerings and loyal customer bases.
Why It Matters
While retail sales are up, the minimal volume growth suggests shoppers are paying more but buying less. Inflation continues to dictate spending habits, and retailers must adapt by leaning into value, experience, or digital convenience.
What’s Next
Inflation remains a factor, and promotional activity is still subdued. As a result, in-store retail performance will likely continue to face pressure, especially in discretionary and experience categories. Digital strategies and curated inventory will be key differentiators heading into the holiday season.
