r toes in the next few months.  “As we approach the second half of 2025, macroeconomic signals in the US remain mixed, but recent retail sales data suggest that consumers are not pulling back,” he said. Instead of retreating from making purchases, shoppers are becoming more intentional, value-conscious and channel-agnostic. “Retailers are entering an era of ‘stable but selective’ growth where agility, speed and precision are no longer advantages, they are requirements. At the same time, the specter of ‘stagflation’, marked by stubborn inflation and uneven economic momentum, remains a looming risk for retailers,” Kumar warned.  Stabilization over a slowdown Despite ongoing concerns about the economy falling into a recession, Kumar observed that the US retail sector is not signaling a collapse in 2025.  Instead, the researcher suggested that current trends point to a gradual normalization of consumer demand. Coresight Research has projected that US retail sales growth will remain within the low single digits throughout most of the second half of 2025, averaging 3.4 per cent from May through December. This would be broadly in line with the 3 per cent average growth seen in January through April.  There is an expectation of mild inflation acceleration, partly due to the Trump administration’s 10 per cent global tariff rate.  What retailers should keep in mind for 2025 Q3 and Q4  In a report, Kumar broke down 10 predictions for retailers to keep in mind for Q3 and Q4.  Stagflation Kumar compared the convergence of this current period of slow economic growth and persistently high inflation to the economic conditions of the 1970s. Within the context of this “stagflation”, an amalgamation of stagnant economic growth and high inflation, consumers are likely to reassess their priorities, focusing more on essential needs and comparison shopping and deferring larger discretionary purchases. The rise of staycations “We expect travel plans, both international and domestic, to contract as families opt for more affordable leisure alternatives closer to their homes,” Kumar forecasted. This will likely mean that local entertainment options, such as movie nights and fast casual dining, are likely to thrive, while hospitality, fuel and tourism sectors may experience a downturn. A surge in secondhand shopping The resale market has grown significantly more crowded over the past few years, thanks to the rise of fashion trends, like the Y2K revival, and Gen Z’s openness to the category.  Now, even more consumers will be turning to resale markets as a practical response to inflationary pressures.  Resale sites like Depop are in a prime position to benefit, whereas more retailers should consider selling their own vintage stock. Apparel brands like Gap and Diane Von Furstenberg have already started doing this.  Deal-seeking becomes the norm As prices continue to rise, thanks to factors like tariffs, consumers will increase searches for how to get the best deal on a product.  According to a Coresight Research survey conducted in May, 66 per cent of US consumers reported noticing retail price increases that month, up from 60 per cent in April.  Among those who observed increased prices, 61 per cent said they were trading down in grocery categories, compared to 53 per cent who reported trading down in non-grocery categories.  Kumar noted that “retailers must fine-tune their promotional strategies to attract value-driven shoppers while simultaneously managing the challenge of maintaining profitability.” Deal hunting expands – but baskets shrink While shoppers may be upping the number of stores they visit to hunt for bargains, Coresight Research expects the average basket size per trip to decline. This shift will complicate inventory planning and sharpen the need to optimize in-store engagement and conversion. “To remain competitive, retailers must double down on agility,” Coresight’s Kumar cautioned.  To stay ahead of the game, retailers should consider deploying AI for real-time demand forecasting, dynamic pricing and consumer behavior insights, or they will risk being left behind. Private-label momentum builds Coresight Research forecasted that private-label offerings will see accelerated growth across multiple categories, especially apparel, beauty and grocery, as consumers seek value without sacrificing quality. For retailers like Walmart, this presents an opportunity to protect margins while building brand equity. Slower electronics sales In a stagnation-influenced economy, parents and households will likely postpone big-ticket electronics purchases amid tighter budgets.  To respond to this shift in consumer behavior, Kumar advised retailers in the consumer tech and education sectors, such as those offering educational tablets, smartboards and other learning technologies, to adapt their seasonal sales strategies. Emotional fatigue sets in Ongoing economic and global uncertainties will contribute to emotional burnout among consumers, Kumar reflected. Retailers and brand owners that proactively express empathy, transparency and support will stand out as they will be fostering loyalty through authenticity. Resilience in the “third place” Coresight Research predicted that consumers will increasingly seek refuge and connection in “third places” – spaces outside of the home and work, such as gyms, coffee shops, libraries and wellness centers. Retailers with proximity to, or partnerships with, these venues may see increased footfall and emotional loyalty spillover. A third option would be for retailers to invest in creating their own “third place”, as seen with Ralph Lauren and Coach launching their own coffee shops.  The rise of the resilient few Kumar theorized that retailers that deliver consistent value, efficiency and trust, such as Aldi (discounter), Costco (warehouse club) and Temu (e-commerce), are set to lead. The market is likely to consolidate around a handful of high-performance players that are set to thrive amid the current economic uncertainty. Stay ready to be resilient  For now, the temporary tariff pause through August will help give retailers a narrow but vital window to secure inventory, alleviate port congestion and build resilience in supply chains. Kumar stated that strategies including private-label expansion, modular assortments and hyper-targeted promotions, especially toward price-sensitive consumer segments, will be essential for protecting margins and meeting shifting demand.  “As the 2025 holiday season approaches, we expect to see earlier, deeper discounts, supported by personalized engagement and loyalty initiatives aimed at maximizing conversion amid a cautious spending environment,” Kumar concluded.