Q1 2025 Business Outlook: Market Winners and Losers Revealed

In early 2025, retail and e-commerce face a reset: more traffic, less buying. Platforms stay busy, but seller profits shrink. Growth now depends on precision, not volume.

1. Essentials Drive Retail Stability

Q1 results show essentials holding strong, non-essentials weakening. Costco grew 7.5% with solid grocery and online sales; Walmart stayed steady, especially inland; Target saw demand drop for big-ticket items. Consumers are cautious, pushing retailers toward memberships, localization, and fewer discounts.

2. U.S. South and Inland Markets Show More Resilience

These regions recover faster due to lower costs, stronger job markets, and high retail chain presence.

 For sellers, this means shifting focus beyond coastal hubs like LA and NYC to inland markets with stable demand.

3. E-commerce: From Growth to Efficiency

Amazon’s Q1 seller service revenue hit $150B, with third-party sellers driving 62% of sales.

 But rising FBA costs are cutting into profits—especially for low-price categories.

 Amazon’s new “Supply Chain by Amazon” offers efficiency but reduces seller control.

4. Growth Slows for Temu and TikTok Shop

Temu and TikTok Shop are losing momentum amid logistics issues and slower U.S. growth. Sellers are responding by trimming SKUs, prioritizing high-margin products, and improving supply chains and branding.

5. 2025 Strategy Priorities

•  Focus on essentials and regional demand patterns

•  Cut weak SKUs and manage fulfillment costs

•  Prioritize delivery reliability and post-sale service

•  Shift attention to inland U.S. markets with real growth potential