US Retail Sector

The 645,400 retail establishments in the US purchase goods from manufacturers and distributors and sell a mix of those goods to consumers and businesses. Specialty retailers sell a particular type of merchandise, such as furniture or jewelry, broad line retailers sell a wide variety of merchandise and include department stores, sporting goods stores and gift and souvenir stores. Big box stores (Walmart, Target) and wholesale clubs (Costco, Sam’s) are competition for a wide range of retailers.

Competition from Online Retailers

The coronavirus pandemic shut down brick-and-mortar stores and accelerated the adoption of online shopping by consumers.

Battling Against Inventory Obsolescence

The retail sector is in a constant state of change, driven by trends, fads, seasonality and perishability.

Sep 11, 2026 - Digital Fatigue Revives In-Store Appeal: JLL

• Digital fatigue is creating an opportunity for US retailers to strengthen physical-store traffic, with nearly 75% of consumers saying they would shop more often in quieter, lower-stimulation stores, according to an August JLL report in Facilities Dive. JLL found that more than 80% of consumer spending still occurs in stores, while more than 80% of shoppers enjoy discovering products they would not have searched for online. The findings suggest retailers may benefit from reducing screen clutter and emphasizing comfortable layouts, product discovery, and spaces that encourage shoppers to linger. The trend is especially notable among younger consumers: 53% of Gen Z actively reject online shopping, while 78% of millennials would shop more in quieter stores. For retailers, store design is becoming a competitive tool for increasing visits, engagement, and potentially dwell time.
• Weakening consumer confidence points to a softer outlook for US retailers as households become more cautious about discretionary spending. The University of Michigan Index of Consumer Sentiment fell 7.5% in September to 47.8, down 13.2% year over year. Its Current Economic Conditions Index declined 1.9% to 50.9, down 15.7% annually, while the Consumer Expectations Index dropped 11.1% to 45.8, down 11.4% year over year. Separately, the Conference Board Consumer Confidence Index edged down in August to 89.4 from 90.2. Its Present Situation Index rose to 121.2, but the Expectations Index fell to 68.2, signaling greater concern about future jobs, income, and business conditions. Together, the readings suggest greater price sensitivity and softer discretionary retail demand.
• US retail sales remained resilient in July 2026, extending growth to a 10th consecutive month despite mixed economic signals, according to the CNBC/NRF Retail Monitor, powered by Affinity Solutions. Total retail sales rose 0.32% month over month and 5.15% year over year, while core sales increased 0.3% monthly and 4.72% annually. The strongest year-over-year gains came from electronics and appliances (+12.04%), digital products (+12.02%), health and personal care (+10.07%), general merchandise (+8.3%), and clothing and accessories (+6.55%). Grocery sales also grew 4.52%, while furniture and home furnishings posted a more modest 2.71% gain. Weaker categories included building and garden supplies (-1.2% YoY) and sporting goods, hobby, music, and book stores (-3.01%). The results suggest consumers are still spending, but remain value-conscious and selective, favoring promotions and essential or higher-priority categories over some discretionary purchases.
• US retail real estate rent growth continued to normalize in the second quarter, with CoStar reporting asking rents rose 1.6% year over year, down from 1.9% in the first quarter and marking the slowest annual growth in more than a decade, according to a Chain Store Age report. While easing rent increases reflect softer consumer spending, elevated interest rates, and higher tenant costs, retail fundamentals remain historically healthy. Slower rent growth may provide retailers with modest occupancy cost relief as they expand or renew leases, although rent spreads remain near multi-decade highs because many existing leases are still below market rates. Meanwhile, retail development remains measured, with 72.1 million square feet under construction—below the 10-year average—and concentrated in high-growth Sun Belt markets such as Dallas, Houston, and Austin. The combination of limited new supply and moderating rents should help support a stable leasing environment for retailers.

Industry size & Structure

The retail sector is comprised of 645,400 establishments that employ 15.5 million workers and generate $6.9 trillion in annual revenue, according to government sources.

• The retail sector represents 6.3% of the nation's Gross Domestic Product (GDP) and employs 12% of the country's workers.
• The sector is concentrated at the top with the 20 largest retail firms representing a third of revenue, but it is fragmented at the bottom.
• In addition to employer establishments, the retail sector has 2.1 million owner-operated establishments with no employees. Subsectors with the highest numbers of nonemployer establishments are direct selling establishments, which include door-to-door sales, home parties, fuel (heating oil and propane) delivery, and meat and meal plans; ecommerce; grocery products; clothing stores, and automobile dealers. The owners of nonemployer establishments typically perform the work and may outsource support functions like marketing and accounting.
• The retail sector shed about 79,000 establishments in 2024, which equals about 12% of existing establishments, according to the Bureau of Labor Statistics. In comparison, the sector added 66,000 new establishments in 2024.
• The retail sector is forecast to reduce its employment base by 1.2% overall in 2024-2034, which is lower than the national average of 3.1% for all jobs, according to the Bureau of Labor Statistics.