US Retail Sector NAICS 44, 45

Aug 22, 2025 - Surge in Retail Job Cuts

• According to a new report in Retail Dive, the retail sector had 80,487 job cuts in the first seven months of 2025, a nearly 250% increase year over year. The Challenger, Gray & Christmas report cites tariffs, inflation, and broader economic uncertainty as driving the workplace contraction, with the potential for further losses if consumer spending declines. According to the report, many companies in the retail sector have not released hiring plans for the rest of the year, noteworthy considering the upcoming holiday season. The US lost over 806,000 jobs in total across all industries, the most since 2020, when over one million job cuts occurred. According to the report, more than a third of the cuts in the first seven months were attributed to job eliminations by the Department of Government Efficiency (DOGE).
• Indicators measuring the collective mood of US consumers show mixed signals, with consumer confidence levels slightly up and consumer sentiment falling. Consumer confidence levels, an indicator of discretionary expenditures, improved in July 2025, month over month, rising by 2 points, according to the Consumer Confidence Index. Consumer confidence levels have stabilized since May but remain lower than last year’s, according to The Conference Board, which publishes the monthly index. July’s gain can be attributed to consumers over 35 years old and shared across all income groups, except the lowest income group earning below $15K. In addition, the consumer sentiment index from the University of Michigan dropped in August 2025 for the first time in four months. The index fell to 58.6 in preliminary August data from 61.7 in July. Year-ahead inflation expectation results were higher monthly, as consumers convey lingering anxiety about prices amid tariff impacts. The index serves as a predictor of consumer spending as it indicates consumers’ perception of their financial prospects and the broader economy.

• Back-to-school shopping is inching earlier, with 67% of respondents shopping in early July 2025 compared to 55% in 2024, according to an annual back-to-school survey released by the National Retail Federation and Prosper Insights and Analytics. Half of back-to-school families report shopping earlier this year, out of concern that prices will increase due to tariffs. According to the survey, “Consumers are being mindful of the potential impacts of tariffs and inflation on back-to-school items, and have turned to early shopping, discount stores and summer sales for savings on school essentials.” The survey estimates that total US back-to-school spending for families with students aged elementary through high school will reach $39.4 billion, up from $38.8 billion last year. The top destinations for back-to-school shopping include online (55%), department stores (48%), discount stores (47%), and clothing stores (41%).
• Retailers are cutting back on free shipping to offset tariff costs. Some retailers are eliminating free shipping, while others are raising the amount that customers must spend to qualify for free shipping, as a way to pass along higher costs to consumers, according to a recent Wall Street Journal report. One fashion lunchbox retailer has raised the threshold for shoppers to qualify for free shipping to $300 from $150. Retail-technology provider Narvar noted that the average minimum-order threshold for retailers to offer free shipping has increased from $82 in 2023 to $103 in 2025. Adjusting the shipping price is appealing to retailers since it does not change the front-facing shopping price to consumers, per Narvar CEO Anisa Kumar.