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.

Nov 9, 2026 - NRF Forecasts Holiday Retail Sales Growth

• US retail sales during the November–December 2026 holiday season are expected to increase 4.2% year over year to approximately $1.013 trillion, up from $972 billion in 2025, according to an October 2026 forecast from the National Retail Federation (NRF). The forecast suggests that consumers remain willing to spend on gifts and seasonal merchandise despite household budget pressures, although affordability concerns may encourage greater price comparisons and promotional shopping. Retailers could benefit from stronger overall sales, but individual results will depend on merchandise categories, competitive pricing, inventory management, and the ability to protect margins.
• Nearly half (49%) of surveyed US consumers planned to reduce spending due to financial pressures or economic uncertainty, while 57% rated current economic conditions as fair or poor, according to November 2026 research from Circana. Nearly three-quarters of holiday shoppers expected to use money-saving strategies, including promotions, rewards programs, and store brands. The findings suggest that retailers will need to offer compelling value while maintaining attractive product assortments. Strong promotional competition may support sales volumes but can also pressure profit margins, particularly in discretionary categories.
• Moody's Ratings forecasts revenue growth of 2% to 4% and adjusted operating earnings growth of 0% to 2% for the global retail and apparel industry over the next 12 to 18 months, according to an October 2026 report that upgraded the industry's outlook to stable from negative. Easing tariff costs and relatively stable household finances contributed to the improved assessment. However, Moody's warned that demand remains uneven, with lower-income households facing greater financial pressure. US discount, off-price, and value-focused retailers may be better positioned than businesses dependent on discretionary purchases. The forecast underscores continuing differences in performance across retail categories.
• US retail sales increased for the 12th consecutive month in September 2026, according to the CNBC/NRF Retail Monitor. Total sales excluding automobile dealers and gasoline stations rose 0.28% month over month and 4.05% year over year, reaching $560.8 billion. Core retail sales, which also exclude restaurants, increased 0.27% monthly and 3.73% annually to $453.1 billion. Electronics and appliance retailers led annual category growth at 8.41%, while furniture and home furnishings retailers were the only category reporting a decline, falling 2.7%. The results indicate resilient consumer spending despite higher gasoline prices and continued household budget pressures. However, uneven category performance suggests retailers selling discretionary merchandise face greater challenges, reinforcing the importance of competitive pricing, promotions, and inventory management.

Industry size & Structure

The retail sector is comprised of 1 million establishments that employ 17.7 million workers and generate $7.1 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 is forecast to reduce its employment base by 0.2% overall in 2025-2035, which is lower than the national average of 3.5% growth for all jobs, according to the Bureau of Labor Statistics.