Retail sales rise 1.4% in March as shoppers stock up on big ticket items
ahead of tariffs
[April 17, 2025] By
ANNE D'INNOCENZIO
NEW YORK (AP) — U.S. shoppers stepped up their shopping last month,
fueled by a spending spree on big ticket items, particularly cars,
before President Donald Trump’s expansive new tariffs started kicking
in.
But analysts were quick to point out that the data wasn't a sign of
strength but underscored the extreme economic uncertainty that shoppers
face and how they want to get ahead of higher prices.
Retail sales rose 1.4% in March, after rising 0.2% in February,
according to the Commerce Department.
Tbe number marked the highest percentage gain since January 2023, when
it was 4.1%, according to FactSet.
Retail sales fell 1.2% in January, hurt in part by cold weather that
kept more Americans indoors, denting sales at car dealers and most other
stores.
Excluding sales at motor vehicle and parts dealers, sales rose 0.5% in
March, compared with the previous month.
Sales at motor vehicles and parts dealers rose 5.3%, and the report also
underscored strength elsewhere. Sales rose at electronics stores,
sporting goods retailers and clothing and accessories stores. Grocery
stores and online retailers also saw gains. Restaurants had a 1.8%
increase. However, furniture and home furnishings stores posted a
decline.
“These are simply blow out numbers on March retail sales where the rush
is on like this is one gigantic clearance sale,” said Christopher S.
Rupkey, chief economist at FWDBonds LLC in a published note. “Consumers
are expecting sharply higher prices the next year and are clearing the
store shelves and picking up bargains while they can. ”
Daniel Holland of Charlotte, N.C., said he was paying more attention to
tariffs after buying his new bike in February from Trek Bicycle Store.
“I’m aware of it, especially with bike parts or just anything
manufactured overseas,” he said Wednesday.
“I think right now there’s a lot of questions around what could happen
and what’s directly affected, whether it’s just parts or the entire
bikes in general,” Holland said. “Was I aware of it before buying this
bike? Maybe not, but I am going forward for sure.”
Economists expect sales will likely fall over the next few quarters.
“With the economy set to cool sharply in the coming months as tariffs
take their toll, price-sensitive consumers are poised to become more
judicious with their spending and reduce their nonessential purchases,"
EY Senior Economist Lydia Boussour wrote in a note Wednesday.
Consumers’ confidence has already taken a hit. And a growing number of
retailers and suppliers are halting shipments from China as well as
pausing orders as they wait to see where the tariffs settle. In some
cases, they are canceling orders.
The result of the trade wars so far: a baseline tariff on most countries
of 10%, with imports from China getting taxed at a combined 145%. Goods
from Canada and Mexico face tariffs of up to 25%, while imported autos,
steel and aluminum are taxed at that same rate. China retaliated last
week with a 125% tariff on U.S. goods.
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 Early this month, Trump announced
sweeping and steep tariffs on nearly all trading partners. But after
Trump’s U- turn last week that paused the new tariffs on about 60
nations for 90 days, average U.S. duties remain much higher than a
couple of months ago.
Last Friday, the Trump administration announced
tariff exemptions on electronics like smartphones and laptops but a
few days later said they’re only a temporary reprieve.
Against this background, U.S. consumer sentiment plunged in April,
the fourth consecutive month of drops, in a seemingly sharp
disapproval of Trump’s trade wars that have fueled anxiety over
possible job cuts and rising inflation.
Analysts say the big retailers will be able to navigate better than
the smaller ones, which don’t have the clout to absorb extra costs
or pressure their suppliers. But it also depends on the type of
goods they sell, particularly if they have goods sources from
overseas.
Ashley Hetrick, principal and sourcing and supply chain segment
leader at accounting firm BDO, noted that stores are more cautious
about ordering seasonal items because they have a shorter shelf
life. She said that the canceling of orders hasn't been widespread.
Walmart executives pledged last week it will keep delivering low
prices as it navigates Trump’s escalating trade wars with China.
But the nation’s largest retailer told analysts that it’s still
vulnerable to the challenges and is monitoring the fluid tariff
situation. The company told analysts that sales have been volatile.
Amazon CEO Andy Jassy said last week that the company has been doing
everything it can to keep prices low for customers, including
bringing in goods early ahead of the barrage of tariffs and
negotiating with suppliers.
But Jassy told CNBC’s Andrew Sorkin Thursday that its network of
third-party sellers will have to pass on the higher costs to
sellers.
Paul Farago, president of Ace Marks, a footwear company in Miami,
said that the big tariff bill on Chinese goods has already forced
him to pause production on a less expensive version of its Ace Marks
brand, which was supposed to be the company’s engine of growth.
The “diffusion” line, made in China with synthetic material, is
priced at around $120. Farago estimated that with the new tariffs,
the shoe line will have to be priced at around $300, the same price
as the expensive leather version made in Italy. The diffusion line
was developed three years ago, and it had already reached 10% of its
overall business. Farago had hoped that by 2026, it would be 30% to
40% of the company's total sales.
Farago said he will have to disappoint a lot of his store clients
and shoppers who are looking for affordable footwear. The new shoes
were supposed to be shipped in June or July.
“The investments we were looking to make and the people we would
have hired to help us run this business…. That’s now off the table,”
he said.
_____
Video Journalist Erik Verduzco in Charlotte, N.C., contributed to
this report
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