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US retail sales fell 0.6% in July, the worst month since 2025

August 16, 2026
5 min
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CEO at Nova Analytics

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Antoine founded Nova Analytics to empower Amazon sellers with enterprise-grade analytics. He specializes in data architecture and building scalable solutions for e-commerce businesses.

Quick Summary

  • •July 2026 retail and food services sales were $763.6 billion, down 0.6% from June
  • •Sales were still up 2.6% year over year, so the level held while the direction reversed
  • •It is the sharpest monthly decline since May 2025
  • •Softer demand arrives while tariff-driven landed costs are still rising
  • •Re-check Q4 order quantities against the last eight weeks rather than the first half of the year

Nova surfaces every Amazon fee, refund, and margin shift in your live P&L, across 23 marketplaces. See it in your data

What happened

US retail and food services sales came in at $763.6 billion in July 2026, down 0.6% from June and the sharpest monthly drop since May 2025. Sales were still up 2.6% year over year, but the monthly direction reversed (US Census Bureau advance retail sales, August 14, 2026).

The pullback was broad rather than concentrated in one weak category, and it landed in the same week as further evidence that tariff costs are reaching shelf prices (PBS NewsHour, August 14, 2026).

Why it matters for sellers

One soft month is not a trend. What makes this one worth reading is the combination: consumer spending easing at the same time landed costs are rising, right before the quarter that carries most of the year's profit.

In that setup, the instinct to raise prices to defend margin and the instinct to discount to defend volume are both available and both wrong when applied across the whole catalogue. The answer is per SKU, and it depends on whether a product's demand actually moves with price.

There is also a planning consequence. Q4 forecasts built on the first half of 2026 assume a spending run rate that July did not deliver. Over-ordering into softer demand ends as long-term storage fees and January liquidations, both of which show up in your P&L long after the season closes.

What to do this month

  1. Split the catalogue by contribution margin, not revenue. Softer demand punishes thin-margin volume first.
  2. Test price moves on a handful of SKUs before the season. August is cheap to be wrong in. November is not.
  3. Re-check Q4 order quantities against the last 8 weeks. Use recent velocity, not the first half of the year.
  4. Watch ad efficiency weekly. When conversion softens, the same spend buys fewer orders and TACoS drifts before anyone notices.

How Nova helps

  • Amazon P&L - net profit per SKU, per marketplace, so a demand dip is visible in profit and not just in units.
  • Winners & losers - ranks the products driving the swing so a soft month has a short list attached to it.
  • A/B testing - measure a price or listing change against profit before you roll it out to the catalogue.

Frequently Asked Questions

Common questions about this topic

US retail and food services sales were $763.6 billion in July 2026, down 0.6% from June and up 2.6% from July 2025, according to the Census Bureau advance estimate published August 14, 2026.
On its own it does not. It matters because consumer spending is easing at the same time landed costs are rising, immediately before the quarter that carries most of the year's profit.
Neither across the whole catalogue. The decision is per SKU and depends on contribution margin and whether demand for that product actually moves with price. Test on a small set before applying anything broadly.
Forecasts built on the first half of 2026 assume a run rate July did not deliver. Re-check order quantities against the last eight weeks of velocity, because over-ordering into softer demand ends as long-term storage fees and January liquidations.
Ad efficiency. When conversion softens, the same spend buys fewer orders and TACoS drifts upward before anyone notices in a monthly review.

Verified Sources

All information verified from official Amazon sources and trusted industry analysts as of publication date.