Retail-sales read-through: who won August’s spend (and who didn’t)

August U.S. retail and food services sales rose 0.6% m/m and 5.0% y/y to $732.0B. Big winners were non-store/e-commerce, restaurants, and value chains/warehouse clubs; laggards included department stores and certain discretionary store formats. Into the holidays, promotions, freight/input costs, and labor set the margin battleground, with omnichannel leaders better positioned to flex pricing and mix. (Census.gov)

The August print: what the government data says

• Topline: Advance U.S. retail & food services sales were $732.0B, +0.6% m/m and +5.0% y/y. Retail trade alone rose +4.8% y/y. (Census.gov)
• Category leaders (y/y):
  • Nonstore retailers (e-commerce & marketplaces): +10.1%.
  • Food services & drinking places: +6.5%.
  • Clothing & accessories: +8.3%.
  • Miscellaneous store retailers: +10.7%.
  • General merchandise: +1.9% (department stores -1.0%).
    These are from Table 2 of the August release.

Why it matters: The composition skews toward services and e-commerce, with value-oriented formats steady but not explosive. Department stores again underperformed, a caution for high-fixed-cost boxes with weaker traffic leverage.

The digital layer: comps vs e-commerce momentum

• Online spend: U.S. consumers spent $78.0B online in August, +7.5% y/y, per Adobe’s Digital Economy Index. BNPL usage year-to-date (Jan–Aug) hit $56.3B, underscoring financing tailwinds for discretionary baskets. (Adobe for Business)
• Omnichannel leaders:
  • Walmart reported U.S. comp +4.6% (ex-fuel) in Q2 FY26 and U.S. e-commerce +26%, leaning on store-fulfilled delivery/marketplace and ad monetization. (Walmart Corporate News and Information)
  • Target: comparable sales -1.9% with digital comps +4.3% as stores lagged; traffic and trends improved vs Q1, but the mix still implies margin work ahead. (corporate.target.com)
  • Costco: August retail month comps +6.1% (U.S.); Q4 comps +5.1% and e-commerce +13.6% amid value trading-down and membership strength. (investor.costco.com)

Read-through: The share shift to omnichannel ecosystems is intact. Retailers with fast last-mile from stores and ad networks (e.g., Walmart) translate traffic into mix and margin. Club models (Costco) continue to capture inflation-weary households via private label and fee economics. Department stores’ negative comps highlight structural share loss.

Category/chain commentary from the print

Apparel & accessories: The +8.3% y/y in Census data suggests back-to-school helped basics and value apparel; however, department stores -1.0% y/y shows migration to specialty, off-price, and online.

Restaurants: +6.5% y/y signals resilient experiential spend, but note promotional intensity and wage sensitivity can cap flow-through.

General merchandise: +1.9% y/y overall, with warehouse clubs and supercenters outpacing traditional formats—consistent with company prints (Costco strength; Walmart positive comps).

Nonstore/e-commerce: +10.1% y/y in Census and +7.5% y/y online dollars from Adobe confirm the channel’s lead; BNPL usage remains a lever for average order value in discretionary baskets.

Margin sensitivity into holiday: where the cracks and cushions are

1) Promotions & price investment

• Value leaders are already rolling back prices to defend share (Walmart highlighted ~7,400 rollbacks in the U.S.). Expect front-loaded promotions on electronics, toys, and apparel to smooth demand before major events. Margin offset levers: retail media (ad) growth and marketplace mix. (Walmart Corporate News and Information)

2) Input costs & tariffs

• NRF flagged that tariffs are feeding through to commodity-linked categories, nudging prices higher and potentially pulling forward buys. Retailers with private label and regional sourcing blunt pass-through better than brands with thinner scale. (nrf.com)

3) Labor & operations

• Restaurants and service-heavy formats face higher wage floors and staffing needs into peak weeks; big-box peers lean on automation and curbside/pickup scale to protect unit economics—again advantaging omnichannel leaders. (Macro: August restaurant sales strength vs department store softness suggests where labor dollars are earning returns.)

4) Mix shifts & membership

• Membership economics (clubs) and retail media (omnichannel marketplaces) are critical cushions as promotional intensity rises. Costco’s Q4 showed membership fee income +14%; Walmart cited global advertising +46% (incl. Vizio) and strong e-commerce growth, creating non-merch profit pools to offset markdowns. (Reuters)

Winners vs. laggards: August scoreboard

Winners

• E-commerce & marketplaces: fastest growth by channel; BNPL aids basket size.
• Warehouse clubs & value supercenters: steady comps, traffic capture from price-sensitive households. (investor.costco.com)
• Restaurants: resilient nominal growth; watch for promo-driven traffic vs check.
• Apparel specialty/off-price: tailwinds from back-to-school, though margin depends on promo mix.

Laggards

• Department stores: negative comps in the government data; structural traffic pressure.
• Certain discretionary big-box store formats without strong digital or membership flywheels: slower growth and higher markdown sensitivity into peak. (Inference from comps dispersion across chains.) (corporate.target.com)

What to watch into Holiday ’25

1. Price investment vs. ad monetization: Do retailers with large retail-media networks expand margin dollars even as gross margin % thins? (Walmart points to that path.) (Walmart Corporate News and Information)
2. Tariffs & input costs: Any broad-based price increases in commodity-heavy categories that shift spend timing or mix. (nrf.com)
3. E-commerce velocity: Does Adobe’s +7.5% y/y pace sustain as promos ramp and BNPL usage climbs? (Adobe for Business)
4. Club momentum: Membership revenue and renewal rates as shock absorbers for markdowns. (Costco’s latest comps and fee income strength are key tells.) (Reuters)
5. Category cadence: Apparel and electronics are sensitive to promo calendars; restaurants to wage dynamics and traffic mix (dine-in vs delivery).

Methodology & sources (key links)

• U.S. Census—Advance Monthly Retail & Food Services (Aug 2025): headline growth and category detail. (Census.gov)
• Adobe Digital Economy Index (Aug 2025): online spend, BNPL usage. (Adobe for Business)
• NRF/ CNBC Retail Monitor (Aug 2025): back-to-school and tariff commentary. (nrf.com)
• Company prints: Walmart Q2 FY26 (comps, e-commerce), Target Q2 2025 (comps, digital), Costco August/Q4 comps & e-commerce. (Walmart Corporate News and Information)

Editorial standards, disclaimers & conflicts

Educational, not advice. This article is for information and education only and does not constitute investment, legal, or tax advice. We do not make buy/sell/hold recommendations. Any strategy or company reference is illustrative and based on publicly available data as cited above. Markets change; verify figures from primary sources before acting. We do not receive compensation from any company mentioned.

Data notes. Government figures are seasonally adjusted and nominal (not inflation-adjusted). Company numbers refer to the periods and definitions in their releases (e.g., “comp sales ex-fuel”). Always review original filings/transcripts for exact definitions. (Census.gov)