While Retail Sales Saw a Strong First Half of 2025, Will 'Cracks Starting To Show' Worsen in Months To Come?

The U.S. retail sector as a whole showed resilience through the first half (H1) of 2025, according to a recent article detailing data from both Colliers and Placer.ai, penned by Nicole Larson.

Of note, foot traffic overall showed improvement YoY in H1 2025, which Larson suggested indicated both the overall resilience of the American consumer base as well as continued demand for brick-and-mortar shopping. Car washes (up 10.3%), theaters and music venues (9.2%), attractions (5.6%), and fitness venues (4.3%) lead the way, however, signaling that experiences continued to resonate with consumers — but discount and dollar stores (up 2.9%), clothing retailers (2.6%), department stores (2%), grocers (1.7%), hobbies, gifts, and crafts (1.5%), and furniture stores (1.4%) also saw an uptick in traffic.

Conversely, beauty and spa services (down 0.6%), fast food restaurants (-0.7%), pet stores (-1%), electronics stores (-1.1%), superstores (-1.1%), home improvement stores (-1.4%), gas stations and c-stores (-1.5%), restaurants (-1.6%), sporting goods outlets (-2.3%), and drug stores and pharmacies (-2.6%) saw less foot traffic in the first half of the year.

Breaking out the top 10 chains which saw a change in year-over-year foot traffic, based on Placer.ai data, produced the following list:

• Chili's Grill & Bar (up 21.7%)
• Crunch Fitness (10.1%)
• GameStop (9.5%)
• LA Fitness (9%)
• Staples (8.2%)
• Hobby Lobby (7.5%)
• Nordstrom (6.5%)
• Ollie's Bargain Outlet (6.3%)
• HomeGoods (5.9%)
• Barnes & Noble (5.3%)

"Several chains catering to mid- and high-income consumers — including Nordstrom, Staples, LA Fitness, and Barnes & Noble — experienced significant growth in visits per venue," Larson wrote.

"This suggests that while value matters, brands don’t need the lowest prices to win customers. Consumers want confidence that they’re getting their money’s worth. Brands that effectively communicate their value proposition can thrive, no matter the final price point," she added.

Retail Sales Held Firm in H1 2025, But 'Cracks Are Starting To Show'

Examining a graph attached to the report — one which showed core retail sales holding at ~2.5% growth in the first half of 2025, versus 2024 — Larson pivoted to point out that much of the vaunted consumer resilience trumpeted by headlines had been definitively propped up by high-income households. By contrast, middle- and lower-income households had curtailed their spending. By extension, she explained, retailers who can cater to wealthier demographics, or whom can successfully promote their value proposition, are and will do better than those who fail to capitalize.

"Retailers should note that underlying volume growth, which strips out inflation and tariff-influenced buying, has been consistently weaker than top-line figures suggest. Analysts warn that this could foreshadow softer performance in the second half of 2025, especially as inflation, interest rates, and tariff impacts start to ripple more clearly through the supply chain," Larson added.

Finally, the report turned to discuss vacancy rates as part of the equation: Projected to hold steady, particularly given a significant 45% drop in new construction, closures in freestanding formats (described examples including pharmacies and discount stores) could spur localized increases. Asking rents are expected to tick upward by about 2%, attributed to limited supply and strong tenant demand.

Overall, store-based retail sales are projected to grow by 1.5% as 2025 draws to a close (notably lower than the 2% seen thus far in H1), taking down a 76% share of all retail sales. One caveat: "Elevated inflation could weigh on consumer volume growth and leasing momentum in more price-sensitive segments," Larson concluded.