Tariffs likely drive March US retail sales splurge; 1 new bankruptcy

US retail spending in March rose from February as consumers likely sped up near-term purchases ahead of prospective new tariffs and related price increases.

March total retail and food services sales in the US rose 1.4% month over month, according to seasonally adjusted advance estimates from the US Census Bureau, matching analyst consensus expectations based on economist forecast data compiled by Econoday.

Since the beginning of his term in January, US President Donald Trump indicated that wide-ranging tariffs would likely be announced in April, potentially leading consumers to rush purchases in the first quarter. Trump ultimately presented a plan April 2 to enforce a 10% universal tariff with higher rates on select countries. The higher-rate tariffs were later delayed for all countries except China, for which duties instead steadily escalated.

"Retail sales came in better than expected, and while normally that would be a good thing for markets, it is very possible that consumers are front-loading their purchases and we may be seeing an artificial bump in sales, which the market will likely look through," said Chris Zaccarelli, chief investment officer for Northlight Asset Management, in an email.

S&P Global Market Intelligence recorded one new bankruptcy filing among public and certain private retailers from March 17 to April 16. The default risk for publicly traded retail companies picked up in mid-April from mid-March.

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Sales

Adjusted retail and food services sales totaled a combined $734.87 billion in March, up from $724.54 billion in February and up 4.6% from March 2024. Adjusted sales over the first three months of the year were up 4.1% year over year.

Sales increased in 11 of the 13 retail and food service categories tracked by the Census Bureau sales data on a month-over-month basis, led by the jump in motor vehicle sales. The data showed that spending at building material and garden equipment and supplies dealers had the second-largest jump with a 3.3% increase ahead of the spring season.

"If this is just a pull forward of demand, it will lead to weakness in the future," Jeffries Chief US Economist Thomas Simons said in a note. "However, we think it is significant that consumers are willing and able to pull forward demand. Despite uncertainty about the future and weak readings on consumer confidence, they spent a lot of money in March."

Nonstore retailers, such as e-commerce sellers, saw sales rise only 0.1% month over month.

The only retail categories with sales drops were furniture and home furnishings stores, down 0.7%, and gasoline stations, down 2.5%.

Without the drag from gasoline stations, retail sales in March rose 1.7% month over month. Excluding both the lower gasoline station sales and stronger automotive sales in March, retail sales climbed 0.8% to beat consensus expectations of a 0.4% increase.

Bankruptcies

Local Eateries Inc. filed for bankruptcy on March 17 with liabilities of $13.8 million at the time of filing. The company operates the Porter Road Butcher shop in Nashville, Tennessee, and also sells its products through other third-party locations throughout the state.

There have been six retail sector bankruptcies in 2025 through April 16, according to Market Intelligence data. More broadly, the consumer staples and consumer discretionary sectors combined had 33 bankruptcies through the end of March.

Default risk

The odds of default for publicly traded retailers climbed to 4.1% on April 14 from 3.4% on March 14, according to Market Intelligence's market signal probability of default model. The data encompassed 214 retail-sector companies.

The scores represent the median odds of default on debt within a year and are based primarily on the volatility of share prices for public companies on major US exchanges, accounting for country- and industry-related risks and other macroeconomic factors.

Of the 16 distinct retail industries tracked by Market Intelligence in April, the median probability of default scores increased for 13 retail categories and fell for only the food retail sector. Food retail's median default risk dipped slightly to 0.6% from 0.8% in March.

Median default risk rose the most for the consumer electronics and apparel retail sectors, each with a 1.8-percentage-point increase in April from March. Both sectors have significant import exposure to Asian countries, many of which were subject to some of the highest duties in the US' delayed tariff plan.

The consumer electronics segment also had the highest overall median default risk at 9.0%.