While retail sales grew in 2025, not all segments are spending equally, the National Retail Federation (NRF) said in a recent report examining credit and debit card data across consumer spending levels.

The NRF’s data revealed that many retail sectors show the outlines of a K-shaped economy, which is when “different income groups grow at drastically different rates, with their relative performance diverging like the arms of the letter K.”

NRF broke down 2025 consumer spending into deciles, closely mapped to income levels. In consumer discretionary spending, the bottom seven deciles saw negative growth in spending on discretionary items on a year-over-year basis, per the data.

However, the grand total for all incomes was positive for the year, as the top 20% of spenders in discretionary items accounted for over 60% of total spending. “Essentially, strong spending in higher income segments is masking weakness among lower income segments,” NRF wrote.

NRF also noted that the economy does not show as simple of a bifurcation as a K-shape implies. For example, spending on utilities shows limited variation by income level. Meanwhile, spending in department stores was up only for the top income decile, and all income levels increased spending at wholesale clubs.

“What is clear is that across lower- to middle-income households, growth in spending has begun to slow. However, top-line spending remains robust, and some sectors have even managed to retain or grow their share across income groups. We expect to see continued growth at a top-line level for retail into 2026, but it is clear that not all segments of the consumer will be driving this growth,” NRF said.

How did c-stores perform in 2025? Join your peers at the NACS State of the Industry Summit, April 14-16 in Schaumburg, Illinois, to get an exclusive first look at financial and operational data before the NACS State of the Industry Report® is published in June.