Department Stores NAICS 455110

Jan 5, 2026 - Average Growth Expected

• The US department stores industry is projected to grow at a CAGR of 4.25% between 2025 and 2029, according to a forecast from Inforum and the Interindustry Economic Research Fund, Inc. The expected growth rate is comparable to the overall economy‘s anticipated growth. The report projects sluggish but positive economic growth in the coming years. Factors that continue to limit consumer spending are lower consumer sentiment levels, higher interest levels, and elevated price levels. Real disposable income is being limited by a slow rise of employment and higher consumption prices, with a projected increase of real disposable income of 1.8% in 2025 and 1.6% in 2026. The report noted that some shifts in consumer behavior persisted in 2025, including increased online shopping.
• Consumer sentiment in December 2025 signaled a cautious spending environment for the US retail sector. The University of Michigan Index rose 3.7% month over month to 52.9, though confidence remains 30% below December 2024, and 63% of consumers expect rising unemployment. Inflation expectations eased to 4.2% (1 year) and 3.2% (long run), offering modest relief but not enough to shift overall caution. Meanwhile, the Conference Board Consumer Confidence Index fell to 89.1, with the Present Situation Index down 9.5 points and expectations holding at a recession associated 70.7. Consumers continue shifting spending toward essential, lower cost categories. For US retailers, these indicators point to ongoing pressure on discretionary spending, softer demand for big ticket items, and continued strength in value oriented and necessity driven segments. Retailers may face a slow growth environment as consumers prioritize affordability and delay nonessential purchases.

• US consumers plan to spend an average of $890.49 this holiday season, marking the second-highest total in 23 years and offering department store retailers a strong opportunity to capture seasonal demand, according to the National Retail Federation and Prosper Insights & Analytics. Per the report, 44% of shoppers plan to visit department stores, positioning them as a key destination alongside online and grocery channels. Of the total spend, $627.93 will go toward gifts, with the remainder allocated to food, decorations, and greeting cards. Early shopping remains popular, though 63% of consumers expect to make most purchases during Thanksgiving weekend. Retailers are responding with competitive promotions and value-driven assortments to meet demand amid economic concerns and tariff pressures. Gift cards and clothing top wish lists, aligning well with department store offerings.
• In August, regional department store chain Dillard’s partnered with mixed-use developer Trademark Property to buy the Longview Mall in eastern Texas from WPG, according to Retail Dive. The report noted that Longview is considered an “evergreen mall,” due to being the only enclosed regional mall in a 45-mile radius and a critical part of the region’s retail landscape, attracting 3.7 million visitors annually. The new owners plan to upgrade the property and the tenant roster. Analysts see the potential for future mall investments by Dillard’s, depending on the success of its Longview Mall location. According to Brynn Feller, an SVP at commercial real estate firm Northmarq, “For Dillard’s, I think this is a bit of a case study. I don’t think that for them this is a playbook that they’ve rolled out — I think they’re developing it in real time. And I think it’s potentially brilliant.”