At the Crossroads. Retail Resilience vs. Tariff Turbulence

Originally published April 18, 2025. This version was rebuilt from the Census Bureau's retail sales and new residential construction reports and Dunelm's trading update for the FIN archive, and the facts are as of that date.

By mid-April 2025 the data told two stories at once. Shoppers were still spending, partly to get ahead of tariffs, while the housing pipeline that feeds furniture demand was slowing.

The short version

• Census said March retail and food services sales rose 1.4%, while furniture stores slipped 0.7% for the month.
• Census and HUD said March housing starts fell 11.4% to 1,324,000 at an annual rate.
• UK homewares retailer Dunelm reported third-quarter sales up 6.3% to £462 million.

Shoppers keep spending

The Census Bureau's advance estimate put March retail and food services sales at $734.9 billion, up 1.4% from February and up 4.6% from a year earlier. Motor vehicle dealers were up 8.8% from March 2024 as buyers moved ahead of expected tariff price increases.

Furniture and home furnishings stores did not share in the monthly jump. Their sales were down 0.7% from February but up 7.7% from March 2024, a reminder that the yearly comparison was against a weak spring in 2024.

Housing slows

Privately owned housing starts ran at an annual rate of 1,324,000 in March, 11.4% below February's revised rate but 1.9% above March 2024. Building permits were 1,482,000 and completions were 1,549,000.

Completions matter most for near-term furniture demand, because each finished home needs furnishing. Starts and permits point to the pipeline a year or more out, and that pipeline was softening as mortgage rates stayed high.

A homewares retailer grows

Dunelm, the UK's largest homewares retailer, said total sales rose 6.3% to £462 million in the 13 weeks ended March 29, 2025. Digital sales reached 41% of the total, up 4 points, and the company said it remained on track for full-year profit in line with consensus.

The UK result shows that a value-focused home retailer with strong digital sales could still grow in a cautious market, a model U.S. retailers were studying as tariffs threatened their price points.

The crossroads

Spending held up through March, but furniture stores were not the winners of the pre-tariff rush and the housing pipeline was slowing. The second quarter would test which retailers had priced and stocked for the turbulence.

Related on FIN

• Furniture Store Sales Fell 2.7%. Every Other Category Grew.
• Move-In Furniture Tickets Are Drying Up

Sources

• U.S. Census Bureau, Advance monthly retail sales, March 2025
• U.S. Census Bureau and HUD, New residential construction, March 2025
• Dunelm Group, Third quarter trading update (Apr. 17, 2025)