Retail Debrief Recap: What Prime Day performance, back-to-school trends and more reveal about the state of the industry leading into the holidays

Below are some of the highlights from the conversation and key stats and numbers to know: 

State of the industry

• Consumer sentiment has started to trend upward
  • According to the University of Michigan’s consumer sentiment index, U.S. consumer sentiment hit a five-month high in early July. However, it’s still below consumer sentiment levels reported last year. Also worth noting: Those are preliminary numbers for July — final July numbers will come out Friday, August 1.
  • The director of the survey said the data shows that consumers now believe the “worst case scenarios” they were expecting in April and May are not going to happen. Year-ahead inflation expectations have also fallen. 

• But, more price increases could be coming down the pipeline
  • New tariffs are popping up. Fifty percent tariffs on Brazil, for example, are set to take place on August 1. A 15% tariff on E.U. imports will also kick in on August 1. 
  • Because of all the delays, some price increases are only just starting. Nestlé, for example, said on Thursday that it was considering further price hikes in the second half of the year, after already raising prices in the first half of the year. 
  • CNBC did an analysis of 50 Walmart products, tracking their prices between May and July 2025, and found that prices jumped by as much as 51%. The price of a 12-piece cookware set from Drew Barrymore’s line, for example, jumped 51%.
    
• In turn, everybody’s trying to figure out what consumer sentiment will look like ahead of the holidays and figure out their playbooks accordingly 
  • It’s still a little early for holiday spending forecasts — those usually come out around October. 
  • But anecdotally, brands are really viewing big tentpole events like Prime Day and back-to-school season as a preview for what Black Friday may look like this year. 
  • Companies are really focused on growing their email lists to get more people into the funnel, and testing out new marketing channels to better understand them ahead of Black Friday.
     
• Additionally, many CEOs are still planning conservatively for the second half of the year
  • Modern Retail asked Chip Malt, co-founder and CEO of cookware brand Made In, how he was planning for the second half of the year, given where tariffs have ended up, as well as what investments he is still pressing pause on and what he’s moving forward on.
  • He believes a lot of companies tried to hold off on raising prices during the first half of the year and that we’ll see more price increases in the second half of the year, which could worsen consumer outlook. In turn, he said, “We’re still holding on to most hiring and being diligent about spending. The added clarity of the E.U. deal and 50% tariff [on steel and aluminum imports] is still much worse for our business than before this administration. … It’s just hurting our business and ability to hire and invest. The things we’re investing in are big-swing bets, including some AI tests, but we’re not greenlighting small-time costs, like increased headcount, etc.”

How Prime Day went this year 

• Prime Day got off to a slow start, by some accounts 
  • According to one e-commerce consulting agency, Prime Day sales were down 41% on the first day compared to the first day of Prime Day last year.
  • The sluggish start reflected how the expanded four-day event changed consumer behavior. The longer timeline took urgency out of the event, and price-sensitive shoppers exhibited a “wait and see” approach; they waited until later days to buy things after comparing prices across retailers, like Walmart, which hosted their own overlapping sales events around the same time as Prime Day. 
  • Some data suggests the four-day event may have even backfired on Amazon, to some extent. Bloomberg cited data showing that spending on Walmart.com grew 24% year-over-year, six times faster than Amazon Prime Day’s year-over-year growth. Walmart’s web traffic increased 14%, while Amazon’s was flat, and Walmart’s app use grew by 22%, compared with Amazon’s 3%.
  • Overall, this shift in consumer behavior makes sense, given that rising prices because of tariffs are top of mind for many consumers right now. 

• Still, Amazon declared it the “biggest Prime Day event ever” 
  • By one estimate, online spending reached $24.1 billion during Prime Day, a 30.3% year-over-year increase across all retailers. 
  • However, these figures reflect the broader e-commerce landscape, not just Amazon. 
  • Momentum Commerce — the same retail consultancy that initially reported Prime Day getting off to a slow start — analyzed performance across its client set, which represents about $7 billion in annual Amazon revenue. Over the four-day Prime Day event, those clients saw a nearly 5% increase in sales. That’s compared to last year’s Prime Day, plus the two days that followed it.

• Historically, shoppers have used Prime Day to splurge on expensive electronics, but many shoppers this year used the sales event to stock up on household essentials
  • According to Numerator, some of the top-selling items during Prime Day this year, in terms of units sold, were things like dish soap, paper plates and protein shakes.
    
•  Beauty and wellness brands also did well during Prime Day this year
  • According to Numerator, Health & Wellness and Beauty & Cosmetics each commanded around 25% of consumer spending, compared to other categories like Toys & Video Games, which accounted for 12% of consumer spending. Consumer electronics accounted for 18% of consumer spending. 
  • After Prime Day wrapped up, Modern Retail spoke to Front Row, an e-commerce accelerator that has a large number of beauty and wellness brands in its portfolio. They said that part of the reason beauty and personal care brands performed well during Prime Day is that many of them manufacture domestically. That has helped shield them from tariff-related disruptions. 
  • One example is the beauty/skin-care brand Borghese. The brand is not completely immune from tariffs, but it does manufacture most of their products in the U.S., so it’s not as hard hit as some other brands. They said Prime Day sales rose 148% over last year. They even had products sell out. 

The state of big-box retail and back-to-school season

• Even though school doesn’t start for many students until late August or early September, many parents have already wrapped up back-to-school shopping 
  • In one survey from ICSC conducted July 7-9, 55% of respondents said they had already completed their back-to-school shopping, a seven percentage-point increase from a year ago.
  • Deloitte also found an increase in August spending and that less back-to-school spending was planned to be done by the end of July — 61% this year versus 66% last year. 

• Retailers are extending their Prime Day competitor events
  • Walmart’s deals event ran more than a day longer than it did last year. Best Buy extended its summer sales event from three to seven days from 2024 to 2025.

• Retailers are emphasizing where they are keeping prices the same
  • On June 17, Sam’s Club said that, beginning that day through July 22, it would lock in prices on more than 1,000 summer items such as pool floats and fruit trays. A few days later, on June 23, Target said it would maintain 2024 prices on key back-to-school items, including a list of 20 school supplies that add up to less than $20 total, including crayons, colored pencils, notebooks, folders and a “top-selling” $5 backpack — alongside other student and teacher discounts.
    
• Aside from back-to-school, the big contrast is Walmart vs. Target: Walmart is elevating its image, while Target faces sales declines and controversy over its DEI decisions
  • This year, Walmart updated its brand identity with a thicker, bolder logo and spark icon, as well as slightly different shades of blue and yellow — meant to modernize and refresh the brand’s visuals while acknowledging its long history in retail. In June, Walmart took a louder approach to telling people things have changed as it launched a new ad campaign called “Who knew?”
  • Walmart, in a press release last month alongside the new brand campaign, admitted that while it has been known for decades as a big-box store or a budget player, it has changed a lot. The company pointed to a few key evolutions: It said it has grown its online marketplace to more than half a billion items, added same-day deliveries that arrive as quickly as one hour, created a paid membership program in Walmart+ and created a digital experience that is better than people may realize.
  • Some of the biggest changes at Walmart — advertising, Walmart+ membership and its data business — have been spearheaded by Seth Dallaire, a former Amazon exec who came to the company almost four years ago.
  • Meanwhile, communications, marketing and leadership consultants who spoke with Modern Retail in May said they thought Cornell’s message to employees earlier this year was vague and failed to reassure people about any continued commitment to underrepresented groups. We also continue to hear retail analysts and consultants criticize the company’s logistics, with anecdotes of empty shelves or cluttered aisles.