US Retail Slows in September After Successful Summer

US spending fell in September after two robust summer months that received a boost from back-to-school purchasing.

Revenue slipped  0.7% relative to the previous month, following a 0.6% increase in August, the National Retail Federation (NRF) said earlier this month. A US federal government shutdown prevented the Census Bureau from releasing its retail data.

Year-on-year sales remained strong, climbing 5% in September, according to the NRF.

“Retail sales dipped in September as consumers hit the pause button after two solid months of back-to-school spending,” said NRF CEO Matthew Shay. “Amid continued economic uncertainty, consumers opted to preserve spending power in preparation for the important holiday season.”

September sales improved year on year in eight of the nine categories the NRF monitors. The clothing and accessories segment — which encompasses jewelry — grew 7% year on year and was down 1.1% from the previous month. Meanwhile, the building and garden supply category was the only one to see a yearly drop, falling 1.2% year on year but gaining 0.5% month on month.

As the holiday season approaches, the 2025 Retail Return Landscape report — which the NRF and UPS company Happy Returns released recently — predicts that consumers will return $849.9 billion worth of products and services, or about 16% of annual sales. This is similar to last year’s figure of 17%, which totaled $890 billion. Although overall return rates are likely to stay stable, certain sectors are experiencing greater strain. Shoppers will return an estimated 19% of online sales this year, according to the report.

“Return policies and their overall process have transformed into a strategic touchpoint for retailers, influencing how younger consumers shop from the outset,” said Happy Returns CEO David Sobie. “To stay competitive amid rising return rates and behaviors like bracketing, retailers must modernize their reverse logistics to enhance customer satisfaction, reduce fraud and safeguard their operations in today’s high-pressure retail landscape.”

Image: People at a shopping mall in San Jose, California. (Shutterstock)