Retail Sales See Gains, Reports Commerce

Why It Matters

The data confirms that consumer spending remains a robust engine for U.S. economic growth, shaping retailer strategies and investor expectations for the coming years.

Key Takeaways

• February retail sales up 0.6% month‑over‑month.
• E‑commerce sales jumped 7.5% year‑over‑year.
• NRF projects 2026 sales reaching $5.6 trillion.
• Forecast exceeds ten‑year average growth of 3.6%.
• Higher‑income households drive most of the projected growth.

Pulse Analysis

February’s retail report shows a modest 0.6% month‑over‑month rise, but the 3.7% year‑over‑year gain underscores a still‑healthy consumer base. The standout performer was the non‑store sector, where e‑commerce surged 7.5%, reflecting the continued shift toward digital channels. Food services also posted solid growth at 5.2%, indicating that dining out remains resilient despite lingering inflation pressures. Together, these figures suggest that while overall spending is steady, the composition of retail purchases is evolving toward online and experience‑driven categories.

The NRF’s 2026 forecast of $5.6 trillion in retail sales represents a 4.4% annual increase, comfortably above the decade‑long average of 3.6%. The projection excludes auto dealers, gas stations and restaurants, focusing on core retail activity. NRF analysts cite higher‑income households as the primary growth engine, bolstered by low unemployment, modest wage gains and larger tax refunds from the Working Families Tax Cut Act. Although geopolitical tensions and trade policy uncertainties linger, the federation remains optimistic that underlying economic fundamentals will sustain consumer confidence.

For retailers and investors, the outlook signals a need to double‑down on omni‑channel strategies and target affluent segments that are driving the bulk of projected growth. Companies that can blend physical presence with seamless digital experiences are likely to capture the strongest share of the anticipated spending surge. Meanwhile, policymakers should monitor inflation trends, which NRF expects to stay elevated through mid‑year before easing in the third quarter, as price stability will be crucial for maintaining the current consumption momentum into 2026.