Retail turnover rates in 2025 have become a critical metric for businesses navigating an increasingly complex economic landscape. Recent data shows U.S. retail sales fell 0.9% in May 2025, marking the first year-over-year decline since the COVID-19 pandemic when excluding automobile and gasoline sales. This downturn reflects broader shifts in consumer behavior and economic pressures affecting retailers worldwide.
The current retail environment presents unique challenges as companies face multiple headwinds including trade policy uncertainty and tariff implementations.
While some sectors like online retail continue to show growth with 8.3% year-over-year increases, traditional brick-and-mortar retailers are experiencing significant pressure.
Meanwhile, retailers have cut over 75,000 jobs from January to May as companies adjust to changing market conditions.
Understanding these turnover patterns becomes essential for business leaders making strategic decisions about inventory management, staffing, and market positioning.
The data reveals distinct performance variations across different retail categories, with some sectors adapting more successfully to current economic conditions than others.
Key Takeaways
- Retail turnover rates in 2025 show significant variation across different market segments and geographic regions
- Trade policies and economic uncertainty are major factors driving changes in retail performance and employment levels
- Online retail continues to outperform traditional retail channels despite overall market challenges
Understanding Retail Turnover Rate in 2025
Retail turnover rate measures how quickly employees leave their jobs and get replaced within retail businesses.
The measurement methods have evolved in 2025, and the rates show notable changes compared to previous years due to economic shifts and changing worker expectations.
Definition and Measurement
Retail turnover rate calculates the percentage of employees who leave a company during a specific time period.
Companies divide the number of departures by the average number of employees, then multiply by 100.
Standard Formula:
- (Number of departures ÷ Average number of employees) × 100 = Turnover rate
Most retailers track turnover monthly, quarterly, and annually.
They separate voluntary departures from involuntary terminations for better analysis.
Modern measurement includes predictive analytics in 2025.
Companies use software to identify employees likely to quit based on performance data, scheduling patterns, and engagement surveys.
Retailers also measure turnover by department, position level, and employee demographics.
This helps identify problem areas within stores or specific roles with higher departure rates.
Comparison with Previous Years
Retail turnover rates dropped in 2025 compared to 2023 and 2024.
The average retail turnover rate sits around 60-65% in 2025, down from peaks of 75-80% in previous years.
Several factors contributed to this decline:
- Higher wages across the industry
- Better benefits packages including health insurance
- More flexible scheduling options
- Improved training programs
The decrease follows economic uncertainty that made workers more cautious about job changes. Retail sales performance in May 2025 showed consumers pulling back on spending, which affected hiring patterns.
Part-time worker turnover decreased more significantly than full-time employee turnover.
This shift reflects retailers investing more in retention strategies for all employee types.
Key Differences in 2025
The retail turnover rate 2025 shows distinct patterns compared to earlier years.
Technology integration changed how companies track and predict employee departures.
Major Changes:
- AI-powered scheduling reduces burnout-related departures
- Real-time feedback systems help managers address issues faster
- Mobile apps for shift trading and communication improve job satisfaction
Remote work options expanded for retail corporate roles, reducing turnover in office positions.
Store-level positions gained more advancement opportunities as companies focused on internal promotion.
Economic factors also shaped turnover patterns.
Workers stayed longer due to concerns about finding new jobs during uncertain times.
This created more stable staffing but sometimes trapped unhappy employees in positions they wanted to leave.
Generational differences became more pronounced.
Younger workers still changed jobs frequently, while older retail employees showed greater loyalty to employers who offered security and benefits.
Major Drivers Impacting Retail Turnover Rate
Retail turnover rates in 2025 are shaped by shifting consumer spending habits, rising economic uncertainty, and evolving core retail sales patterns.
These factors create a complex environment where retailers must adapt quickly to maintain revenue stability.
Consumer Spending Patterns
Consumer spending behavior has fundamentally changed how retailers approach sales forecasting and inventory management. Same-day delivery expectations now drive purchasing decisions, with nearly 70% of customers considering delivery speed important when buying online.
Young consumers lead this shift. 20% of Gen Z expects same-day delivery and nearly 60% will pay extra for it.
This creates pressure on retailers to maintain faster inventory turnover.
Private label products now represent over 20% of consumer packaged goods sales.
Major retailers like Target generate over $30 billion annually from private labels.
This trend affects turnover rates as retailers control more of their supply chain.
Key spending shifts include:
- 36% of shoppers actively seek private label brands
- 65% purchased private label products in six months
- 75% of consumers globally shop resale markets
Social commerce is reshaping purchase patterns. TikTok converted 35.3 million users into social buyers in 2023, while beauty and personal care account for 25% of social commerce purchases.
Economic Uncertainty and Inflation
Economic instability directly impacts retail turnover rates through changed consumer behavior and cost pressures.
Retailers face multiple challenges that affect how quickly they move inventory.
Inflation pressures force consumers to seek value alternatives.
This drives growth in private label purchases and resale markets.
The resale market grows 11 times faster than traditional retail, reaching potential $350 billion by 2027.
Cost management becomes critical as retailers balance:
- Rising operational expenses
- Consumer price sensitivity
- Inventory carrying costs
- Supply chain disruptions
Tariff impacts are already visible. Nike expects $1 billion in tariff-related costs for fiscal 2026, affecting pricing strategies and turnover planning.
Economic uncertainty makes consumers more selective.
They delay purchases or seek alternatives, forcing retailers to adjust turnover expectations and promotional strategies.
Core Retail Sales Trends
Core retail sales performance reveals underlying turnover patterns across different segments. Digital transformation accelerates turnover rates through improved efficiency and customer reach.
AI adoption helps retailers achieve 2.3x sales growth and 2.5x profit increases.
More than 70% of AI-adopting retailers report decreased operating costs, improving turnover efficiency.
Mobile commerce drives growth as consumers increasingly shop via smartphones.
This creates opportunities for faster inventory movement through personalized recommendations and streamlined checkout processes.
Physical retail adapts with experiential offerings.
Only 23% of Americans show strong brand loyalty, pushing retailers toward memorable in-store experiences that can boost turnover rates.
Delivery innovation impacts turnover:
- Walmart extends delivery hours from 6 AM to 10 PM
- Amazon expands drone delivery for pharmacy orders
- Target launches Target 360 with free same-day delivery
China’s retail sales show unexpected strength while factory output slows, indicating shifting global demand patterns that affect international retail turnover rates.
Influence of Trade Policies and Tariffs
Recent trade policies and tariff changes have created significant pressure on retail businesses, leading to increased costs and staffing adjustments that directly affect turnover rates.
The National Retail Federation has tracked these impacts as retailers navigate supply chain disruptions and pricing challenges throughout 2025.
Tariffs and Price Implications
President Trump recently raised tariffs on steel and aluminum imports to 50%, doubling the previous rate from three months earlier.
This dramatic increase forces retailers to make difficult decisions about absorbing costs or passing them to consumers.
Companies face mounting pressure as Trump’s trade policies prompt companies to raise prices and cut staff.
These dual pressures create a challenging environment for maintaining stable workforce levels.
Retailers must balance customer retention with operational costs.
Higher tariffs on imported goods increase inventory expenses, forcing businesses to evaluate their staffing needs more carefully.
Key tariff impacts include:
- Increased product costs for imported merchandise
- Pressure to reduce labor expenses
- Need for supply chain restructuring
- Higher employee stress from operational changes
Impact of Evolving Trade Policies
Trade negotiations continue to shape retail operations across multiple regions.
Trump recently firmed up a trade deal with the United Kingdom, while European Union neighbors push for similar agreements.
These changing policies create uncertainty for retail managers planning their workforce strategies.
Companies must adapt quickly to new trade rules and cost structures.
Federal Reserve officials met with concerns about Trump administration policies affecting economic growth.
This uncertainty makes long-term staffing decisions more challenging for retailers.
The unpredictable nature of trade negotiations forces retailers to maintain flexible staffing models.
This flexibility often leads to higher turnover as employees seek more stable positions elsewhere.
Role of National Retail Federation
The National Retail Federation provides crucial data on how trade policies affect retail performance.
They reported that core retail spending rose about 4.2% from May 2024 to May 2025, excluding car, gas, and restaurant sales.
Despite this growth, the organization warns of significant spending shifts ahead.
These shifts directly impact staffing needs and employee retention strategies across the retail sector.
The federation tracks how consumers continue to spend on retail as tariff impact looms.
This monitoring helps retailers understand market conditions and plan their workforce accordingly.
NRF tracking focuses on:
- Consumer spending patterns
- Tariff impact assessments
- Industry-wide employment trends
- Policy recommendation development
Retail Sales and Category Performance in 2025
Retail performance in 2025 shows mixed results with declining convenience store sales contrasting against resilient sectors like discount retail, while digital channels face headwinds and traditional categories experience varied momentum.
Overall Retail Sales Movement
Total U.S. convenience store sales declined for a second consecutive year in 2024, though the decrease was smaller than in 2023.
In-store sales growth hit its lowest point in six years across the convenience sector.
The retail landscape shows clear winners and losers. Walmart and TJX Companies have gained significant advantage as consumers prioritize value in today’s cost-conscious environment.
Consumer sentiment remains cautious as shoppers watch every cent during challenging economic times.
This behavior directly impacts retail sales patterns across different categories.
Value-focused retailers continue to outperform premium brands.
Discount chains and off-price retailers benefit from shifting consumer preferences toward affordability.
Digital and Online Retail Growth
Digital retail faces unexpected challenges in 2025. Nike’s digital revenue declined in Q4, while in-store sales provided a bright spot for the athletic retailer.
This trend suggests consumers are returning to physical stores for certain product categories.
The shift challenges assumptions about continuous digital growth in retail.
Retail media continues to evolve as retailers seek new revenue streams beyond traditional sales.
Digital advertising within retail platforms becomes increasingly important.
E-commerce growth rates have stabilized after years of rapid expansion.
Physical retail locations regain importance as shopping destinations.
Building and Garden Supply Stores Trends
Building and garden supply stores face sector-specific challenges in 2025. Laminate flooring experienced a slowdown in 2024 after previous years of strong growth.
The category had enjoyed a resurgence within the U.S. market before recent deceleration.
Home improvement spending patterns shifted as consumers adjusted priorities.
Garden supply stores within this sector show varied performance based on regional factors.
Seasonal fluctuations impact these retailers more than general merchandise stores.
Building materials face pressure from construction industry changes.
New home construction rates directly affect demand for building and garden supply stores.
Sectoral Shifts and Consumer Sentiment
Australia’s retail sector demonstrates resilience in early 2025 with consumer discretionary spending defying economic headwinds.
This international example shows regional variations in retail performance.
Consumer sentiment varies significantly by product category and price point.
Essential goods maintain steady demand while discretionary items face pressure.
Key performance indicators show:
- Convenience stores: declining sales
- Discount retailers: strong growth
- Digital channels: mixed results
- Specialty categories: varied performance
Retailers adapt strategies based on changing consumer behavior.
Cost-conscious shopping drives decisions across all retail segments.
The retail landscape continues evolving as companies adjust to new consumer priorities and economic conditions.
Global Retail Turnover Rate: Comparing Key Markets
Major retail markets showed mixed performance in 2025, with the United States experiencing month-over-month declines while maintaining year-over-year growth.
China demonstrated resilience with unexpected retail sales increases, while Australia faced ongoing economic pressures affecting consumer spending patterns.
United States Retail Turnover Developments
The U.S. retail sector experienced notable shifts in May 2025. Online sales grew 8.3% year-over-year while total retail sales declined compared to April.
Total retail sales decreased for back-to-back months since March 2025.
This decline occurred as the Trump administration announced multiple tariff changes on imported products.
However, when compared to 2024, total U.S. retail sales increased every month in 2025.
Key Performance Metrics:
- Online sales: $125.492 billion in May 2025
- Year-over-year online growth: 8.3%
- Month-over-month online growth: 1.81%
Excluding automobile and gasoline sales, retail performance showed different trends.
May 2025 marked the first time since April 2020 that retail sales decreased year-over-year with these exclusions.
Core retail sales grew 0.1% month-over-month and 3.9% year-over-year.
The e-commerce share reached 15.9% of total retail sales in the first quarter of 2024.
This represented an increase from the previous quarter.
Australia’s Retail Turnover Movement
Australia’s retail turnover data for 2025 remains limited in available reports.
The country typically tracks retail turnover through monthly statistics that measure total sales across various retail categories.
Australian retail performance traditionally correlates with consumer confidence levels and employment rates.
The Reserve Bank of Australia’s monetary policy decisions significantly impact retail spending patterns across the country.
Key retail categories in Australia include food retailing, department stores, clothing and soft goods, and household goods.
Each category responds differently to economic conditions and seasonal variations.
The Australian Bureau of Statistics regularly publishes retail turnover figures.
These reports provide insights into consumer spending behavior across different states and territories.
China’s Retail Turnover and Consumption
China’s retail sector showed unexpected strength in May 2025. Retail sales growth was surprisingly upbeat despite industrial output slowing to 5.8% year-over-year.
The retail sales performance exceeded forecasts while factory output missed expectations.
This divergence highlighted the resilience of domestic consumption amid manufacturing challenges.
China’s Economic Indicators:
- Industrial output: 5.8% year-over-year in May 2025
- Previous month industrial output: 6.1% in April 2025
- Retail sales: Beat expectations in May 2025
Consumer spending in China demonstrated strength across various retail categories.
This performance occurred despite broader economic headwinds affecting manufacturing sectors.
The Chinese government’s policy support for domestic consumption contributed to retail resilience.
Stimulus measures and consumer incentives helped maintain spending levels throughout the first half of 2025.
Retail Turnover Rate Outlook for the Remainder of 2025
Economic indicators point to changing patterns in retail employment stability through the second half of 2025.
Consumer spending shifts and policy changes are expected to create new pressures on retail workforce retention.
Projected Trends and Forecasts
The home improvement market shows projected growth of 3.4% in 2025, down from earlier forecasts of 5.0%.
This downward revision signals potential staffing adjustments across retail sectors.
US retail sales dropped more than expected in May, with a 0.9% decline.
Motor vehicle purchases saw significant decreases as consumers rushed to beat potential tariff-related price increases.
Key retail sectors experiencing pressure:
- Automotive sales departments
- General merchandise stores
- Gas stations and convenience stores
Restaurant industry data shows total sales of $97.4 billion in May.
This sector traditionally faces higher turnover rates during economic uncertainty.
E-commerce continues showing resilience with Q1 sales growth at 1.5 times total retail growth.
Online retail positions may see lower turnover rates compared to traditional brick-and-mortar stores.
Role of Consumer Sentiment
Consumer spending pulled back sharply in May, driven by declining gas sales and economic uncertainty.
This shift directly impacts retail staffing needs and employee retention strategies.
Reduced consumer confidence typically leads to:
- Decreased hiring in customer-facing positions
- Increased job insecurity among retail workers
- Higher voluntary turnover as employees seek stability
The economic activity was artificially boosted early in 2025 as businesses and consumers rushed to make purchases.
This temporary spike created hiring surges that may now reverse.
Retail managers are adjusting schedules and staffing levels based on reduced foot traffic.
Part-time workers often face the first cuts during economic slowdowns.
Consumer hesitancy affects different retail categories unequally.
Essential goods retailers may maintain stable employment while luxury retailers experience higher turnover rates.
Potential Impacts of Inflation and Tariffs
Shoppers have been pulling back amid worries about higher prices from Trump’s tariffs.
These policy changes create uncertainty that affects both consumer behavior and retail employment patterns.
Inflation pressures on retail turnover:
- Higher living costs push workers to seek better-paying positions
- Retailers face pressure to reduce labor costs
- Benefits packages become more important for retention
Tariff implementation creates inventory management challenges.
Retailers must balance stock levels with uncertain demand, affecting staffing decisions.
Import-dependent retailers face particular challenges.
Electronics, clothing, and home goods stores may experience higher employee turnover as profit margins compress.
Labor shortages in certain regions may offset some turnover concerns.
Retail employers in tight labor markets may need to improve compensation and working conditions to retain staff.
The US economy is poised for a summer slowdown, suggesting retail turnover rates may increase as economic conditions tighten through the remainder of 2025.
Frequently Asked Questions
Retail turnover rates in 2025 continue to present challenges across various positions and business types.
The industry sees particularly high turnover among front-line workers, with new safety regulations and economic factors playing significant roles in employment patterns.
What is the average retail turnover rate observed in 2025?
The average retail turnover rate in 2025 ranges between 60% and 75% annually.
This figure varies significantly based on company size and location.
Front-line retail positions experience the highest turnover rates.
Sales associates and cashiers typically see turnover rates between 70% and 85%.
Management positions show lower turnover rates at approximately 25% to 35%.
These roles benefit from higher compensation and better advancement opportunities.
Seasonal fluctuations affect these numbers significantly.
Holiday hiring periods can temporarily increase turnover calculations due to short-term employment contracts.
How does the retail sector turnover compare to other industries in 2025?
Retail maintains one of the highest turnover rates across all industries in 2025.
The sector ranks second only to hospitality and food service.
Manufacturing industries report turnover rates of 25% to 40%.
This creates a significant gap compared to retail’s 60% to 75% range.
Healthcare and technology sectors show turnover rates between 15% and 30%.
These industries offer more specialized roles with higher barriers to entry.
The construction industry experiences turnover rates of 40% to 55%.
While high, this remains below retail industry averages.
What factors are contributing to the retail turnover rate in 2025?
Wage competition drives significant turnover as employees seek better compensation.
Many retailers struggle to match increasing minimum wage requirements across different states.
Work-life balance concerns affect retention rates substantially.
Irregular scheduling and weekend requirements contribute to employee dissatisfaction.
New workplace safety regulations create additional training requirements and compliance costs.
The Retail Worker Safety Act in New York mandates workplace violence prevention policies for employers with 10 or more retail employees.
Economic uncertainty influences job-seeking behavior.
Employees feel more confident exploring new opportunities in a competitive job market.
Limited advancement opportunities within retail organizations frustrate long-term employees.
Many workers view retail positions as temporary rather than career-building roles.
Which retail positions experience the highest turnover rates in 2025?
Sales associates face the highest turnover rates at 80% to 90% annually.
These positions often involve high customer interaction stress and lower compensation.
Cashiers experience turnover rates between 75% and 85%.
The repetitive nature of the work and customer service demands contribute to high exit rates.
Stock clerks and warehouse workers show turnover rates of 65% to 80%.
Physical demands and overnight shifts increase turnover in these roles.
Department managers experience lower turnover at 30% to 45%.
These positions offer better compensation and more responsibility.
Store managers have the lowest turnover rates at 20% to 30%.
Higher salaries and advancement potential improve retention significantly.
What strategies are businesses implementing to reduce retail turnover in 2025?
Flexible scheduling systems help accommodate employee preferences and life commitments.
Many retailers now offer apps that allow workers to swap shifts easily.
Enhanced training programs focus on career development rather than just job-specific skills.
Companies invest in leadership development to promote from within.
Competitive compensation packages include performance bonuses and benefits improvements.
Some retailers offer tuition assistance and healthcare coverage for part-time workers.
Employee recognition programs celebrate achievements and milestones.
Regular feedback sessions and performance reviews help workers feel valued.
Workplace safety improvements address employee concerns about violence and harassment.
Companies implement better security measures and staff training programs.
How has the turnover rate in the retail industry fluctuated over the past five years?
Retail turnover rates increased from 55% in 2020 to current levels of 60% to 75%.
The pandemic initially reduced turnover due to job scarcity.
The period from 2021 to 2023 saw dramatic increases in turnover rates.
Many employees left retail for other industries offering remote work options.
Economic recovery in 2024 stabilized turnover rates somewhat.
Improved job market conditions gave workers more employment choices.
Technology adoption has influenced turnover patterns over this period.
Self-checkout systems and automated inventory management changed job requirements and availability.
Consumer behavior changes affected staffing needs and employee retention.
Online shopping growth reduced some in-store positions while increasing warehouse and fulfillment roles.