Consumers came back in August and malls kept climbing, but the month's sharpest lesson was about pricing: who holds the line, who reinvests, and who promises not to get too clever.
The retail sector delivered a more encouraging set of signals in September. Spending rebounded after a soft July, physical retail continued its unlikely comeback, and several turnaround stories gained further traction. At the same time, pricing moved to the center of the conversation, as retailers weighed discounting pressure, tariff refunds and growing scrutiny over how technology shapes what shoppers pay.
Consumers reopened their wallets in August, with retail sales rising 1.2% following July's decline and comfortably ahead of economists' expectations. The gains were broad-based, with e-commerce posting its strongest monthly increase in more than a year and a half, and clothing and sporting goods also moving higher.
That resilience is showing up in real estate as well. Malls, long written off as relics of a bygone era, have become the top-performing sector in commercial real estate. Mall values have climbed roughly 13% over the past year, more than double the gain for the broader market, supported by steady consumer spending and relatively few retailer bankruptcies.
Macy's continued to demonstrate that its turnaround is taking hold, posting its sixth consecutive quarter of better-than-expected results. Comparable sales rose 2.7%, led by an 11% gain at Bloomingdale's. Rather than channel its $116 million in tariff refunds into price cuts, the company is directing most of it toward brand-building and accelerated store renovations. Macy's is also rolling out an AI-powered inventory replenishment tool beyond its pilot phase, part of a broader supply chain overhaul aimed at getting "the right product in the right place at the right time."
Pricing technology remained under the microscope. Walmart CEO John Furner sought to reassure customers that the retailer will not use its dynamic pricing capabilities to charge individual shoppers more, writing, "We don't set different prices based on who you are or the time of day, and we won't." Critics were quick to note, however, that the company holds patents that would make such pricing possible.
Elsewhere, On Holding is resisting promotions despite a softer retail climate, betting that product innovation can continue to justify premium prices. The approach has kept gross margins above 65%, though cooling wholesale demand is testing investors' patience.
PVH Corp., parent of Calvin Klein and Tommy Hilfiger, reported a 3% decline in second-quarter revenue, citing soft consumer demand in Europe and the Middle East tied to the war in Iran. Adjusted earnings still topped expectations, aided by tariff refunds, and the company reaffirmed its full-year outlook.
Meanwhile, accessories company Randa acquired Untuckit, the direct-to-consumer shirt brand with more than 70 stores. The deal pairs Randa's capital, global sourcing and retail relationships with the customer base Untuckit built store by store, positioning the brand for its next phase of growth.