As “economic softening” increasingly emerges as the prevailing narrative driving the markets, the retail sector occupies a peculiar space amid these shifts in investor confidence, inflation fears, and looming tariff woes. This is because retail straddles both cyclical and defensive sectors, accounting for a huge chunk of Consumer Discretionary and Consumer Staples spending. January retail spending saw its sharpest decline in two years, though post-holiday spending may have distorted the data. The coming report in mid-March might provide a clearer picture. In a nutshell, here’s what’s weighing on investors’ minds: Tariffs could drive up costs which may be passed on to consumers. Immigration policies might trigger labor shortages, further increasing expenses. Both factors could disrupt the broader supply chain, impacting everything from sourcing to sales. Despite these challenges, analysts are expecting moderate growth for retail in 2025. With that in mind, let’s take a look at where retail stands relative…
