Last week, the Census Bureau released a strong set of retail sales figures. Total retail sales were up 1.4% over February and 4.6% higher than March last year. Of course, this came as no surprise to NRF, as our Retail Monitor data predicted this positive result.
This is good news, right? Not really. It appears that this bump in retail sales resulted from consumers pulling their purchases forward in advance of tariffs. New data from Pyxis by Bain & Co., a partner of NRF’s Consumer Insights Studio, shows that there was a strong ramp-up in buying activity: Electronics sales jumped 30% in the week after the tariff announcement, and many other categories saw large and immediate rises as well (see the full report here).
Looking back to the Census data, the largest gain in March was in the automobile sector. Auto sales increased a whopping 5.3% in March and were up almost 9% year over year. What do electronics and autos have in common? They tend to be big ticket purchases that consumers can pull forward if they’re concerned about prices rising.
Get a first look at how retail sales performed last month with the CNBC/NRF Retail Monitor, powered by Affinity Solutions.
Even before the tariffs were announced, consumers told us they’d behave this way. In a survey conducted for NRF by Prosper Insights & Analytics, 46% of consumers said they were stocking up on household appliances, clothing and other items in early March because they were worried those items would become more expensive because of tariffs.
Why the concern? Purchases that are pulled forward reduce future sales. So March’s benefit is the rest of the year’s loss. Consumers are showing significant concern over the economy — consumer sentiment is now 30% lower than in December. This softer sentiment drove consumers to start saving more and spending less, evidenced by weak sales in January and February. This March bounce, while a short-term positive, isn’t a return to happier times. It’s a harbinger of bigger problems down the line.
