October’s Retail Rebound Signals Shopper Momentum Heading Into the Holidays

Strong Foundations: What the October Data Show

The NRF’s October update via the CNBC/NRF Retail Monitor, powered by anonymized credit and debit card data from Affinity Solutions, showed core retail sales (excluding automobiles, gasoline, and restaurants) rising by 0.6% from September and 4.89% year over year. Total retail sales (also excluding autos and gas) mirrored those gains, up 0.6% month over month and 5.0% year over year. These results come after a sluggish September and help set a firmer footing for the holiday push.

According to NRF President and CEO Matthew Shay, “Recent economic data has been mixed, yet consumer spending remains solid, supported by wage growth outpacing inflation, historically low unemployment, and wealth effects from strong stock market valuations.” In short, consumers appear willing and able to spend, which is encouraging for retailers.

Category-Level Highlights

• Digital products (e-books, games, and other digital goods): up 2.02% month over month and 22.39% year over year
• Clothing and accessories: up 1.42% month over month and 7.89% year over year
• Sporting goods, hobby, music, and book stores: up 0.09% month over month and 7.19% year over year
• General merchandise stores: up 0.58% month over month and 6.99% year over year
• Electronics and appliance stores: up 0.13% month over month and 6.58% year over year
• Grocery and beverage stores: up 0.59% month over month and 4.08% year over year
• Health and personal care stores: up 0.58% month over month and 1.9% year over year
• Furniture and home furnishings: down 0.08% month over month (seasonally adjusted) and down 1.7% year over year
• Building and garden supply stores: down 0.81% month over month and down 8.52% year over year

The broad-based gains across most categories are a good sign, though the weakness in building and garden supplies suggests that not every retail segment is equally resilient.

What This Means for Retailers Heading Into the Holidays

Solid consumer demand provides a promising foundation, but a favorable economic backdrop does not guarantee strong growth. Retailers must align supply chain operations, inventory levels, omnichannel execution, and value propositions to sustain the momentum. With categories like digital products, apparel, and general merchandise performing well, those sectors may be positioned to outperform during the holidays.

Consumers appear ready to spend, but they remain selective. Value, convenience, and experience continue to drive decisions. With wage growth outpacing inflation and household finances generally stable, retailers have an opportunity to use early promotions, curated bundles, and loyalty-based perks to capture attention. The strong rise in digital product sales indicates that technology and entertainment purchases may again be early-season winners.

At the same time, sector disparities are emerging. The softness in building and garden supplies signals a slowdown in home improvement spending, and the decline in furniture and home furnishings suggests lingering caution in high-ticket categories. Retailers in these areas may benefit from conservative inventory strategies, localized offers, and stronger in-store experiences to maintain engagement.

The NRF projects that total holiday sales in November and December will rise between 3.7% and 4.2% over 2024, totaling between $1.01 trillion and $1.02 trillion. That outlook depends on the continuation of October’s positive momentum and assumes inflation, supply chain costs, and consumer sentiment remain stable.

As the season unfolds, the most successful retailers will be those who can convert resilience into results. October’s rebound offers a solid starting point, but execution will define the finish. Retailers that act on early data, adjust quickly to shopper behavior, and maintain consistency across channels will be best positioned to carry this momentum through December and beyond.

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