The situation: Uncertainty has been the defining feature of 2025, and for good reason.

• President Donald Trump’s stop-and-start tariffs have been a centerpiece of his economic agenda, and their shifting nature has made it difficult for retailers to plan and for consumers to adapt.
• The administration’s mass deportation campaign has hit companies that rely heavily on Hispanic spending, as roughly 1 in 5 (21% of) Hispanic consumers report having felt unsafe in their local market due to their ethnicity, per The Asian American Foundation. That unease has prompted many to pull back and move more of their spending online.
• At the same time, several employers are cutting staff, expecting AI-driven productivity gains to reduce their need for human workers.
• And with the cost of essentials—from health insurance to food—continuing to climb, consumers are being forced to rethink how they spend.

Looking ahead: Few of the factors that have made planning difficult for companies and consumers are likely to be resolved in the near term.

• Even if the Supreme Court rules that Trump lacks emergency authority to impose certain tariffs, the administration has pledged to use other levers—such as Section 232 of the Trade Expansion Act of 1962—to keep duties in place.
• The AI boom will likely accelerate, prompting more employers to try to do more with less, especially if the economy weakens.
• And the cost pressures draining consumers’ wallets—housing, energy, transporation—show little sign of easing.

Our take: Uncertainty is here to stay. To stay afloat, retailers must stay nimble: fine-tune pricing, manage inventory with precision, and find fresh ways to keep shoppers engaged.

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