Retail sales grow 5% in October as consumers prepare for holidays

Retail sales bounced back in October after September's decline, demonstrating consumer readiness to spend during the upcoming holiday season despite economic uncertainty and tariff concerns. The CNBC/NRF Retail Monitor released data on November 10, 2025, showing total retail sales excluding automobile dealers and gasoline stations increased 0.6% on a seasonally adjusted month-over-month basis and 5% on an unadjusted year-over-year basis.

Core retail sales, which exclude restaurants in addition to automobile dealers and gasoline stations, also rose 0.6% month over month in October and climbed 4.89% year over year. These figures marked a reversal from September's performance, when core retail sales declined 0.49% month-over-month as consumers preserved spending power before the critical fourth quarter.

"Retail sales grew in October as consumers geared up for the holiday season," stated Matthew Shay, President and CEO of the National Retail Federation. The organization's data showed recent economic conditions remain mixed, yet consumer spending continues at solid levels. Shay attributed this strength to wage growth outpacing inflation, historically low unemployment rates, and wealth effects generated by strong stock market valuations.

Total sales increased 5.11% year over year for the first ten months of 2025, while core sales grew 5.28% during the same period. The October results arrive as the National Retail Federation forecasts 2025 holiday sales will increase between 3.7% and 4.2% compared with 2024 levels, pushing total holiday spending just over $1 trillion.

The Retail Monitor employs actual anonymized credit and debit card purchase data compiled by Affinity Solutions, distinguishing it from survey-based numbers collected by the Census Bureau. This methodology eliminates the need for monthly or annual revisions, providing retailers and advertisers with immediate accuracy regarding consumer spending patterns.

Digital products led October's category performance with 2.02% month-over-month seasonally adjusted growth and 22.39% year-over-year unadjusted expansion. The category includes electronic books, games, and digital downloads. Clothing and accessories stores followed with 1.42% monthly growth and 7.89% annual increases. Sporting goods, hobby, music and book stores added 0.09% month over month and 7.19% year over year.

General merchandise stores increased 0.58% monthly and 6.99% annually. Electronics and appliance stores gained 0.13% month over month and 6.58% year over year. Grocery and beverage stores rose 0.59% monthly and 4.08% annually. Health and personal care stores grew 0.58% month over month and 1.9% year over year.

Two categories experienced declines in October. Furniture and home furnishings stores fell 0.08% month over month seasonally adjusted and dropped 1.7% year over year unadjusted. Building and garden supply stores decreased 0.81% month over month and declined 8.52% year over year, representing the steepest contraction among tracked categories.

October sales grew in all but two of nine categories on both yearly and monthly bases. The breadth of gains across retail segments suggests consumers entered the holiday shopping period with confidence despite persistent concerns about tariff-related price increases. Survey data from October 16, 2025, indicated consumers plan to spend $890.49 per person on average on holiday gifts, food, decorations and seasonal items, representing the second-highest amount in the survey's 23-year history.

The correlation between Retail Monitor figures and U.S. Census Bureau revised retail sales numbers has established the metric as a reliable forward indicator. Real-time card transaction data provides merchants and advertisers with earlier visibility into consumer behavior shifts compared with traditional government reporting schedules, which require multiple revisions as survey responses arrive and seasonal adjustments refine.

Consumer spending during October reflects strategic behavior ahead of the industry's most critical revenue period. Holiday shopping typically generates disproportionate annual sales and profit contributions for retail businesses. The September monthly decline of 0.49% followed what retailers described as two solid months of back-to-school spending that drove elevated July and August activity, suggesting consumers front-loaded discretionary purchases during promotional periods then reduced spending ahead of anticipated holiday shopping.

Marketing professionals face a compressed timeline for fourth-quarter campaigns. Research from October 27-28, 2025, revealed 34% of consumers began holiday shopping in October or earlier, with 71% citing tariff concerns as their top worry heading into the peak shopping season. This early shopping behavior creates challenges for marketers attempting to optimize campaign timing and budget allocation across an extended promotional period.

Retail media networks are projected to capture approximately 20% of total global advertising revenue by 2030, exceeding $300 billion according to Omdia research published September 4, 2025. The concentration of consumer spending during holiday periods makes fourth-quarter planning critical for retailers and advertisers who must balance inventory availability with marketing investment. Commerce media platforms have expanded their measurement capabilities to connect advertising exposure to purchase behavior across both online and offline channels.

The October data provides quantitative evidence supporting strategic holiday planning for retailers and brands. Consumer preservation of spending power during September, followed by the October rebound, suggests concentrated demand during November and December promotional periods. Black Friday falls on November 28, 2025, with Cyber Monday following on December 1, creating traditional peaks for shopping activity and advertising revenue.

Wage growth outpacing inflation provides fundamental support for consumer spending despite persistent economic concerns. The October employment report showed historically low unemployment rates continuing, supporting household income levels that enable discretionary spending during the holiday season. Stock market valuations have created wealth effects that boost consumer confidence, particularly among households with investment portfolios.

However, tariff uncertainty continues affecting consumer sentiment and retailer planning. Import cargo volume at major U.S. container ports should see typical end-of-year slowdowns through November and December according to the Global Port Tracker report released November 7, 2025, by the National Retail Federation and Hackett Associates. Most holiday merchandise has already reached stores or warehouses, allowing retailers to mitigate potential price impacts through strategic inventory management.

The retail industry contributes $5.3 trillion to annual GDP and supports more than 55 million working Americans, making it the nation's largest private-sector employer. Consumer spending patterns during the holiday season influence economic performance across multiple sectors beyond retail, affecting transportation, warehousing, advertising, and financial services industries.

Digital advertising platforms have responded to holiday shopping patterns with enhanced capabilities. Amazon's advertising revenue reached $17.3 billion in the fourth quarter of 2024, demonstrating the financial significance of holiday shopping periods for advertising-supported platforms. Similar growth patterns appear across retail media operators, where fourth-quarter performance typically exceeds expectations due to concentrated consumer demand and advertiser competition for impression inventory.

The October results reflect resilience in consumer spending despite mixed economic signals throughout 2025. Retailers entering the final weeks of the year face both opportunities and challenges, balancing promotional intensity against margin preservation while managing inventory levels and advertising investments across an increasingly complex digital commerce environment.

Timeline

• September 2025: Core retail sales decline 0.49% month-over-month as consumers preserve spending ahead of holidays
• October 1-7, 2025: National Retail Federation conducts annual consumer survey polling 8,247 adults about holiday plans
• October 9, 2025: CNBC/NRF Retail Monitor reports September sales decline, showing strategic consumer behavior
• October 16, 2025: National Retail Federation announces consumers plan $890.49 per person on holiday spending, second-highest on record
• October 27-28, 2025: Wunderkind survey reveals 34% of consumers began holiday shopping in October as 71% cite tariff concerns
• November 7, 2025: National Retail Federation releases Global Port Tracker projecting November-December import slowdown
• November 10, 2025: CNBC/NRF Retail Monitor releases October data showing 0.6% monthly growth and 5% annual increase
• November 27, 2025: Thanksgiving launches intensive holiday shopping period
• November 28, 2025: Black Friday represents year's largest promotional sales event
• December 1, 2025: Cyber Monday extends online shopping focus

Summary

Who: The National Retail Federation released the CNBC/NRF Retail Monitor data, powered by Affinity Solutions, which tracks actual anonymized credit and debit card transactions. Matthew Shay serves as President and CEO of the National Retail Federation.

What: Total retail sales excluding automobile dealers and gasoline stations increased 0.6% month over month seasonally adjusted and 5% year over year unadjusted in October 2025. Core retail sales (excluding restaurants, automobile dealers and gasoline stations) also grew 0.6% monthly and 4.89% annually. Digital products led category growth at 22.39% year over year, while building and garden supply stores declined 8.52% annually.

When: The data was released on November 10, 2025, covering October 2025 retail sales performance. The timing precedes the critical holiday shopping period beginning with Thanksgiving on November 27 and continuing through year-end.

Where: The data covers retail sales across the United States, tracking nine major retail categories excluding automobile dealers, gasoline stations, and restaurants. The National Retail Federation operates from Washington, D.C.

Why: This news matters for the marketing community because consumer spending patterns during October signal readiness for the critical fourth-quarter shopping season, when retailers generate disproportionate annual revenue. Retail media networks projected to capture 20% of global advertising revenue by 2030 depend heavily on holiday-period performance, making these spending indicators essential for campaign planning and budget allocation decisions. The data provides real-time visibility into consumer behavior without requiring monthly revisions, enabling faster strategic responses than traditional Census Bureau reporting.