Tariffs and inflation have retail CEOs looking at a difficult path ahead in 2025, with just 28% expressing optimism about their ability to manage supply chain disruptions brought on by shifting government policies.

According to a survey of 1,200 CEOs from consultancy firm EY Parthenon, confidence in profitability dropped from 44% to 31% between December 2024 and April 2025, while confidence in revenues dipped from 67% to 38% over that same period. A separate report released on May 12 by EY and the World Retail Congress (WRC) further noted that "absorbing tariffs and tax increases is just the tip of a rather large iceberg for retailers." Longer term, EY projects global yearly retail sales growth to fall by roughly 0.2% between 2025 and 2026, and then by another 0.2% by the end of the decade.

"Prices also remain stubbornly high, with measures to curb inflation being challenged and overall wage growth impacting cost-of-living and consumer sentiment," the report reads, adding that the confidence of CEOs in being able to pass cost increases on to customers dropped from 50% to 27% between December and April. Ultimately, EY and the WRC predict that impacts on retailers will not be evenly distributed, and that companies without a diversified base of suppliers will be far more exposed than those with broader networks, particularly given the focus the Trump administration has had on curbing trade with China. 

Even so, the recent trade deal agreed to by China and the U.S. could offer at least a temporary respite for the retail industry at large, with both countries cutting their reciprocal tariffs by 115% for the next 90 days, starting on May 14. In a May 12 release, the National Retail Federation called the move "a critical first step" to provide short-term relief for retailers starting to place orders for inventory ahead of the back-to-school and holiday shopping seasons.

“We urge the administration and our Chinese trade partners to continue discussions to address the ongoing issues, work to remove the remaining national security tariffs, and provide long-term stability between the two largest global economies," the NRF added.