The situation: A range of challenges is making the start of the year tougher for retailers.

• “No-buy January,” a challenge to curb nonessential purchases in the first month of the year, is gaining traction. Google searches for the phrase are at a five-year high, and roughly 1 in 8 (12%) of US consumers are participating in the spending fast, according to a survey conducted by The Harris Poll for NerdWallet from January 8 to 12. More than two-thirds of participants reported sticking with the exercise. That aligns with broader consumer sentiment: Saving more money is the top financial New Year’s resolution this year, cited by 70% of consumers, per a Wells Fargo/Ipsos survey.
• Severe winter weather is likely to keep shoppers home and disrupt store traffic. A major storm in the third week of the year stretched from Texas and Georgia through Minneapolis and much of the Northeast, affecting more than 200 million US consumers.
• Protests in some markets add incremental friction. Hundreds of businesses closed in the Minneapolis area and residents pledged to forgo shopping on January 23 as part of an economic boycott to protest the Trump administration’s immigration crackdown.

Zooming out: Broader economic signals give consumers reason to think twice about spending.

• US consumers are stretched. Disposable personal income rose just 1% in November, the smallest gain since 2022, while inflation-adjusted consumer spending rose 2.6%, per the Bureau of Economic Analysis. That has caused consumers to dip into their savings, bringing the personal savings rate to a three-year low.
• Inflation remains elevated. The personal consumption expenditures price index, the Fed’s preferred measure of inflation, rose to 2.8% for both the headline and core gauges in November. While that met expectations, it ticked up from October and signaled that prices are not moving toward the Fed’s 2% target.
• The labor market remains tepid as the US economy added just 584,000 jobs last year, the weakest growth since 2003. There are signs conditions could worsen. Amazon, for example, reportedly plans to lay off thousands of workers next week, which, combined with its layoffs last fall, would amount to a cut of about 10% of its corporate workforce.

Implications for retailers: January looks poised to be a pressure-filled month rather than a single-issue slowdown. Voluntary spending pullbacks, such as no-buy January, are coinciding with involuntary constraints like winter storms and uneven economic footing. Together, these forces make it easier for consumers to postpone purchases—and harder for retailers to lure them back quickly.

But some relief may be ahead. The Bank of America Institute estimates tax refunds will be about 18% higher than last year thanks to several provisions in the One Big Beautiful Bill Act, including an increase in the standard deduction, new deductions for tip and overtime income, and a rise in the state and local tax (SALT) deduction cap. Consumers are likely to receive refunds between February and April, which could provide a temporary boost to discretionary spending. However, any gains are likely to be short-lived unless broader macroeconomic conditions improve.