Despite a background of geopolitical strife and swiftly shifting tariffs, consumer spending stayed strong in the 2025 holiday season, but that bottom-line total obscured some fundamental shifts in American retail patterns, according to speakers on a panel at the Retail Industry Leaders Association (RILA) show this week.

An overall trend that has continued from past years is the dominance of the country’s top three mega-retailers, which gobble up the lion’s share of U.S. retail consumption growth, said Simeon Gutman, Managing Director, Retail Equity Analyst, Morgan Stanley.

While total U.S. consumer spending is huge—measured at about $5 trillion excluding automobiles and gasoline—most of it is already committed to certain channels and categories, so smaller retailers can typically capture their gains only in the annual incremental growth of that total number. And that increment can be frustratingly small after the mega-retailers have taken their share, he said.

However, a newer trend putting pressure on retail patterns is the growing split between high-end, discretionary spending and low-end daily shopping, panelist Steve Begley, Senior Partner at McKinsey & Company, said. Over the 2025 winter peak, that widening gap—often referred to as a “K-shaped” spending curve—produced strong spending for high-end goods (like golf clubs or beauty & fashion items) and low-end goods (like packaged chicken breasts) but produced sinking spending for mid-range items like consumer electronics.

To cope with those changes, many companies are increasing their spending on artificial intelligence (AI) to improve forecasts and simulations. That approach holds great potential, but very few retailers have yet seen concrete results. In describing retailers’ approach to using AI, the panelists used phrases like “moving through a dark room,” “taking baby steps,” and “keeping the training wheels on.”

Clothing retailer Carhartt has learned some hard-won lessons from its growing pains, as the provider of durable pants and jackets for tradesmen expanded rapidly over the past decade, company executives said on a panel Monday at the Retail Industry Leaders Association (RILA) show.

The company sold its goods for many years through a wide network of mom and pop stores, but has recently grown to add powerful channels such as omnichannel, online, and partnerships with major retailers such as Tractor Supply Co. and Dick’s Sporting Goods. Delivering inventory to those re-sellers proved far more complex than simply maximizing sales volume from its single distribution center, so Carhartt turned to third party logistics provider (3PL) DHL Supply Chain.

Through that relationship, Carhartt soon expanded from using just one building to a network of six warehouses, said Tony Gariety, Carhartt’s vice president, distribution and logistics. Managing that broad new network made its inventory planning process change from a game of checkers to chess, he says. But it also enabled Carhartt to add new tools such as autonomous mobile robots (AMRs) to its increasingly large DCs. In turn, that technology allowed it to quickly double volume by minimizing two important variables in the fulfillment process: footprints and fingerprints, he said.

As it adapted to tracking a wider array of logistics statistics, Carhartt also refined its approach to handling hot growth. “We’re not trying to do the same with less; we’re trying to do more with the same,” Gariety says.