Newsletter — July 31, 2025 | | |
POLICY
ECONOMY
ON THE LOCAL FRONT
POLITICAL NEWS
RETAIL THEFT & PUBLIC SAFETY
IN THE NEWS
TRENDS
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Deadline approaches for compliance with Washington’s Toxic-Free Cosmetics Act
Retailers, distributors, and cosmetologists operating in Washington have until December 31, 2025, to sell or use existing inventory that does not meet the requirements of the state’s Toxic-Free Cosmetics Act (TFCA). The law restricts nine chemicals and chemical classes from use in cosmetic products sold, distributed, or used in Washington.
Starting January 1, 2025, any new products purchased for use or resale must comply with the TFCA. Businesses are encouraged to review product ingredient lists and communicate with manufacturers and distributors to confirm compliance. Retailers and distributors should request documentation or attestations from manufacturers verifying that products meet the law’s standards.
Cosmetologists should also ensure the products they purchase and use are compliant. Buying products from Washington-based suppliers and reviewing the TFCA Guide can help ensure adherence to the law.
The Department of Ecology offers technical assistance and resources for businesses navigating compliance. For more information, access the TFCA Guide or contact ToxicFreeCosmetics@ecy.wa.gov.
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Key bills effective July 27, 2025
July 27, 2025, brought significant changes for businesses, consumers, and communities across Washington. The latest legislative session introduced a series of impactful laws.
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Public testimony highlights growing concerns over workers’ bill of rights
On July 22, employers, workers, and nonprofit leaders from Olympia and Tacoma voiced concerns about the recently certified initiatives that will raise the minimum wage and impose complex workplace rules on all employers, going far beyond Seattle’s labor standards, which apply only to retail and hospitality sectors.
Testimony at the two council meetings reflected a wide range of concerns:
- An in-home senior care franchisee stated that his 40-employee size small business will be unfairly categorized as a large employer. In addition, healthcare and emergency care scheduling cannot conform to the 2-week scheduling mandates without raising costs for vulnerable populations.
- A local restaurant owner said the rules would “take the oxygen out of the business” by removing staffing flexibility.
- A 15-year-old worker shared that the 10-hour rest rule would limit her ability to work on weekends.
- A local nonprofit representative said rising labor costs will force them to drastically limit their meal and shelter services for the unhoused and low-income residents.
- Many urged councils to adopt the initiative immediately in Olympia, stating that small businesses have time to comply and employees retain negotiation power.
Though nearly identical in content, each city’s authority differs. Olympia’s council could only adopt the measure or send it to the ballot. On July 22, they voted to place it on the November ballot to give voters more time. Tacoma’s council has broader authority to revise the proposal before referring it to voters. No action has been taken yet.
WR will continue supporting impacted members and informing voters ahead of the election.
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Deadline approaching for comment on new sales tax changes
The Washington State Department of Revenue (DOR) recently held a series of virtual listening sessions to gather input on the implementation of ESSB 5814, a new law expanding the state’s retail sales tax to include a range of service-based industries beginning October 1, 2025.
Although the listening sessions concluded on July 31, stakeholders still have time to weigh in. The Department is accepting online feedback through Friday, August 1, 2025.
Industries affected by the expanded tax categories include information technology services, advertising, live presentations, custom software, and temporary staffing, among others. Business owners and interested parties are encouraged to review the proposed changes and submit their comments to help shape the Department’s final guidance.
Businesses affected by the expanded tax categories are encouraged to review the proposed changes and participate in a session or submit their input online.
For a summary of tax-related bills passed during the 2025 legislative session and signed into law by Governor Ferguson, visit the Department’s 2025 Tax Legislation page.
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Washington eyes budget challenges amid federal Medicaid shifts
Washington state is facing a potential budget shortfall by 2027, with projections showing a deficit by 2028 despite recent increases in both taxes and revenue. At the center of the conversation is the federal Big Beautiful Bill, which adjusts Medicaid eligibility and could affect state healthcare funding.
Governor Bob Ferguson’s administration has cited the bill as a contributor to what has been called the state’s most significant budget crisis. However, some lawmakers suggest the focus on federal policy overlooks internal fiscal decisions. Senator Ron Muzzall, the ranking member of the Senate Health and Long-Term Care Committee, emphasized the role of state-level spending growth and a lack of reserves.
Washington’s operating budget has more than doubled since the 2013–15 biennium, driven largely by increases in Medicaid and long-term care costs. Recent state-funded expansions have included coverage for undocumented residents, adding $150 million in spending this biennium.
The 2026 legislative session is expected to bring tough fiscal decisions. As lawmakers prepare, discussions continue about balancing federal impacts with the need for long-term budget discipline.
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Retail sales hold steady in June despite economic uncertainty
June marked a solid month for retail sales growth, with total spending up 3.7 percent compared to last year, according to data released in mid-July. Even after accounting for inflation, core retail sales, which exclude gasoline, autos, and foodservice, grew by 0.9 percent in volume terms, underscoring continued consumer resilience.
While tariffs and economic uncertainty remain in the headlines, their full impact has yet to be felt at the cash register. Retailers benefited from delayed tariff deadlines and existing inventory that was not subject to new levies. Many sectors, including apparel and home furnishings, posted gains. Apparel sales rose 2.4 percent, supported by summer discounts and seasonal buying. The home sector also performed well, with furniture stores up 4.3 percent and a modest increase in home improvement sales.
However, department stores faced challenges, posting a 4.5 percent decline, largely due to store closures and evolving consumer preferences.
Looking ahead, economic pressures and looming tariffs could moderate growth in the second half of the year. Still, consumer spending sentiment remains steady, and interest rate changes may influence future performance. Retailers are closely monitoring margins and pricing strategies to maintain customer loyalty.
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Seattle Metro Tops U.S. Inflation Rankings
The Seattle-Bellevue-Tacoma region is experiencing the highest inflation pressure among major U.S. metro areas, according to a new WalletHub report. The analysis compared Consumer Price Index data across 23 metropolitan regions, highlighting short and long-term inflation trends.
In the past two months alone, prices in the Seattle area rose 1.4 percent. Year-over-year, overall inflation hit 2.7 percent, with food prices increasing 4.8 percent and energy costs climbing 5 percent. The largest recent increases were seen in food and restaurant expenses, along with gasoline prices.
Seattle’s rising inflation may be influenced by a range of economic factors. These include higher wages, such as the city’s current minimum wage of $20.76, and recent changes to state gas and diesel taxes. Washington residents also face some of the nation’s highest grocery prices, ranking fourth in the U.S., behind only California, Nevada, and Mississippi.
Experts note that broader forces like federal spending and economic overheating also play a role. While debates continue around potential future tariffs and policy impacts, current inflation is being driven more by consumer demand and supply pressures than by any single political factor.
Retailers and consumers alike are encouraged to monitor these changes as the region continues to navigate an evolving economic landscape.
The full WalletHub report can be viewed here.
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Washington Drops to 14th in CNBC’s top states for business
Washington has dropped to 14th place in CNBC’s annual rankings of the top states for business, falling out of the top 10 for the first time in several years. This marks a notable decline from previous standings, including a No. 2 spot in 2022 and a No. 10 ranking in 2023. The state was ranked No. 1 in 2017.
Despite continuing to score well in key areas such as technology, innovation, and workforce quality, Washington’s ranking was negatively affected by high costs of living and the expense of doing business. CNBC’s analysis pointed to factors like elevated worker wages and the cost of office space as contributing elements.
In contrast, states like North Carolina, Texas, Florida, Virginia, and Ohio led this year’s rankings. The findings underscore ongoing challenges for Washington’s business climate, especially in affordability and operational costs. These insights may prompt renewed discussions on how to maintain the state’s competitive edge while addressing cost-related concerns.
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Early start and economic concerns shape 2025 back-to-school shopping trends
As the 2025 back-to-school season begins, a recent National Retail Federation (NRF) survey reveals that two-thirds of shoppers had already started making purchases by early July. This marks a notable increase from 55 percent at the same time last year. According to NRF, the earlier start is driven by concerns about inflation and the potential impact of tariffs on school-related products.
In a recent analysis, NRF Vice President of Industry and Consumer Insights Katherine Cullen explored these findings, highlighting how economic pressures are influencing consumer behavior. She and NRF Chief Economist Mark Matthews will offer additional insights during a July 23 webinar focused on current spending patterns and retail implications.
Since 2003, NRF has tracked back-to-school shopping habits, offering valuable data to retailers and policymakers alike. This year’s results suggest that families are shopping earlier and more strategically to manage budgets and anticipate rising costs.
Retailers can access NRF’s Back-to-School Headquarters and Data Center for additional insights and tools to navigate the season. For those interested in a deeper dive, registration for the upcoming webinar is now open. Register here.
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Seattle City Council selects former Councilmember for District 5 vacancy
After narrowing the list of potential appointees from 22 to 6 on July 17, the City Council appointed former Councilmember Debora Juarez eleven days later to fill the open District 5 seat until the voters choose a successor in the November 2026 election.
The opening was created by the decision of Councilmember Cathy Moore to resign from the Council for health reasons on July 7, 2025. The Council had 21 days to make an appointment and made the appointment of Juarez on the final day, July 28.
Juarez was first elected to represent District 5 in 2015, the first election with council districts. After winning reelection in 2019, Juarez was elected Council President by her colleagues in 2022. She did not seek reelection to a third term in 2023.
During her 8 years on the Council, Juarez was a moderate who was very focused on the needs of her district. Her accomplishments included convincing Sound Transit to add a light rail station at 130th NE and successfully persuading the Seattle Kraken to build its practice rinks at Northgate.
The other finalists for the appointment were Nilu Jenks (who received one vote), James M. Bourey, Katy Haima, Julie Kang, and Robert D. Wilson.
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Longview facility will advance organic food management goals for retail grocers
With the enactment of multiple organic food management laws in 2022 and 2024, WR has actively engaged in both the legislative process and ongoing rulemaking. As part of these efforts, the Government Affairs team toured DIVERT, Inc.’s new facility under construction in Longview, the first commercial-scale anaerobic digestion plant of its kind in Washington State, now slated to open in early 2026.
While composting inedible food has long been the dominant process, anaerobic digestion offers an alternative that generates renewable biogas as a byproduct. DIVERT’s Longview facility will not only convert inedible food into renewable biogas, which will be directly piped into the regional gas utility for industrial use, but also leverage artificial intelligence (AI) and data analytics to help major grocery retailers reduce food waste at the source. The insights will guide purchasing decisions and improve donation of edible food to food banks, advancing both prevention and diversion goals.
This site visit enhanced understanding of how retail grocers can meet state and local requirements with operational flexibility and cost efficiency. As food waste prevention and landfill diversion remain top priorities for policymakers and our members, WR will continue advocating for cost-effective, scalable solutions that align with these goals.
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Seattle City Council updates ordinances addressing public safety and graffiti
The Seattle City Council recently passed two ordinances aimed at improving public safety by updating the city’s chronic nuisance property law and increasing penalties for graffiti-related offenses.
The revised nuisance property ordinance expands the police chief’s authority and increases financial penalties for property owners tied to repeated criminal or public health-related incidents. A property now qualifies as a chronic nuisance if at least three incidents occur within 60 days or seven within a year. Daily fines were raised to $750, and noncompliance penalties increased to $37,500. Additional amendments broaden the definition of nuisance activity and ensure actual criminal activity is confirmed before action is taken. Social service nonprofits are exempt from certain provisions.
In a separate vote, the Council approved a new $1,500 civil penalty for each graffiti tag that can be linked to an individual, in addition to potential misdemeanor or felony charges. An amendment allows fines to be converted into community service and makes penalties retroactive for up to three years.
Both ordinances passed with strong majorities, though concerns were raised about implementation costs and fairness. The mayor has 10 days to sign the legislation, which would take effect 30 days later.
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Op-Ed: Enough is enough: Washington’s independent restaurants deserve breathing room
The Center Square
July 22, 2025
Opinion: By Jared Nieuwenhuis | Bellevue City Council
About this commentary: The opinions expressed by the authors are their own and do not necessarily represent the opinions of the entire Bellevue City Council.
Across Washington state, family-run restaurants aren’t just places to eat—they’re places of memory, culture, and community. From the teriyaki shops anchoring Seattle neighborhoods to diners in Wenatchee and noodle bars in Spokane, these local treasures carry the flavors of tradition and immigrant ingenuity. But today, they’re being buried under a mountain of regulations, taxes, and fees.
Running a restaurant has never been an easy task. However, it’s now becoming nearly impossible. Owners navigate shifting health standards, absorb staggering utility increases, pay ballooning payroll taxes, and field new reporting mandates with barely a moment’s notice. Just as they recover from pandemic-era losses, they’re hit with fresh burdens—not backed by data or practicality, but by a system indifferent to their reality.
High labor costs—especially in Seattle, where the minimum wage is now $20.76—combined with inflation driving up the costs of food, rent, utilities, and insurance, are squeezing profits. In 2023, the average profit margin for restaurants in Washington was just 1.5%. Even the busiest spots are barely staying afloat. And on top of everything, some restaurant owners are also facing break-ins and theft, which add another layer of expense, with repairs and stolen inventory hitting owners already operating on razor-thin margins.
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Retail Action Council Board announces recent local election endorsements
The WR Retail Action Council Committee has recently approved a round of endorsements, this time focusing on key local elections critical to Washington’s retail and business community.
Endorsements were determined using several key factors, including candidates’ performance on WR’s Consumer Affordability Scorecard, their demonstrated commitment to economic growth, public safety, and job creation, as well as their active engagement with WR’s Government Affairs team and responsiveness to business community priorities.
Here are the newly endorsed candidates:
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SHRM supports AI Action Plan centered on workforce readiness
The Society for Human Resource Management (SHRM) responded positively to the White House’s newly released AI Action Plan, which outlines a national strategy for preparing the U.S. workforce and economy for the growing role of artificial intelligence. The plan emphasizes skills development, workforce readiness, and reducing regulatory barriers, areas aligned with SHRM’s long-standing priorities.
SHRM praised the plan’s worker-first approach, highlighting the importance of pairing innovation with purpose. SHRM President and CEO Johnny C. Taylor, Jr. emphasized that the integration of human and artificial intelligence is critical to building a strong, adaptable workforce.
SHRM research shows that 74 percent of U.S. workers see AI as a complement to human talent. The organization underscored the need for transparent and collaborative approaches to AI adoption, centered on people, preparation, and policy.
Following the announcement, SHRM Chief of Staff Emily M. Dickens met with Dr. Lynne Parker, a senior White House AI advisor, to discuss AI education, workforce strategies, and ways HR leaders can contribute to policy development. SHRM expressed interest in ongoing collaboration to ensure workforce policies reflect employer needs and support the evolving role of AI in the workplace.
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Study reveals widespread underreporting of retail theft
New research from the Retail Industry Leaders Association (RILA) highlights a growing gap between reported retail theft incidents and the actual number of crimes occurring in stores. A study led by Professor Julie Hibdon of Southern Illinois University found that, while external theft in retail has risen significantly, the rate of incidents reported to law enforcement has dropped by nearly half since 2019.
This discrepancy is due in part to factors such as staffing shortages in both law enforcement and retail, evolving crime tactics, and burdensome reporting processes. Some retailers also fear straining relationships with police or facing penalties for excessive reporting. Additionally, policy changes and the use of case consolidation in organized retail crime investigations can further obscure the true scope of theft.
RILA’s findings reinforce what many retailers have long believed: retail theft is increasing, but official crime data fails to reflect it. The report calls for improved collaboration between retailers and law enforcement, consistent reporting guidelines, better online reporting tools, and greater support from technology providers. Accurate data is essential to informing public safety responses, resource allocation, and policy decisions that support safer retail environments.
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Highlights from the 2025 PNWER Annual Summit
The 34th Annual Pacific NorthWest Economic Region (PNWER) Summit took place July 20–24, 2025, bringing together over 600 leaders from across the U.S. and Canada in Bellevue, Washington. Renée Sunde, President & CEO of the Washington Retail Association, proudly served on the event’s Host Committee.
This year’s summit was held at a pivotal time for cross-border relations, with escalating trade tensions threatening long-standing economic partnerships in areas like agriculture, automotive, and tourism. Canadian and U.S. delegates, including elected officials, business leaders, and diplomats, used the event to tackle urgent trade issues and advocate for policies that support a resilient and mutually beneficial regional economy.
Key discussions included:
- The future of North American beef trade, which is under threat from proposed tariffs.
- Rising diplomatic strain, highlighted by sharp comments from U.S. Ambassador Pete Hoekstra, and calls for de-escalation from regional leaders.
- Maintaining cooperation on critical industries like potash, tech, and mineral exports, and ensuring frictionless border travel ahead of events like the 2026 FIFA World Cup.
Despite national-level tensions, the PNWER Summit served as a vital platform for collaboration, innovation, and problem-solving, reinforcing the Northwest’s deep economic interdependence and commitment to building a stronger, unified future.
Sunde joined 24 other attendees on an exclusive tour inside Microsoft’s Cybercrime Center. The experience offered a compelling look at the vast and rapidly evolving landscape of cybercrime, both nationally and globally.
"The tour was absolutely eye-opening," said Renée Sunde. "Witnessing firsthand the scale and sophistication of cyber threats—and the technologies being deployed to fight them—was both staggering and inspiring. It underscored just how critical cybersecurity is to every aspect of our modern lives."
Cyber crime tour video
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Boost your workforce with customized training funds at Clover Park
Washington businesses have a unique opportunity to enhance employee skills through the state’s Customized Training Program (CTP), which currently has approximately $79,000 in available funding. Administered by the State Board for Community and Technical Colleges, this program helps businesses cover the upfront cost of customized employee training provided by institutions like Clover Park Technical College (CPTC) Corporate Education.
Eligible businesses, those located in Washington and paying B&O tax, can partner with a qualified training provider to access support for technical training, leadership development, communication, and more. Training can be delivered in person, virtually, or in a hybrid format to best meet the needs of employers and their teams.
Repayment terms are interest-free, and participating companies benefit from a B&O tax credit equal to 50% of each payment made. Businesses pay 25% upon completion of training, with the remaining balance spread over 18 months.
Training is tailored to each company’s specific goals and is led by experienced industry professionals. Examples of past clients include JM Smucker, True Linkswear, and Psomas.
For more details, contact Don Sosnowski at donald.sosnowski@cptc.edu or Steven Kovacs at steven.kovacs@cptc.edu.
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CVS to rebrand 20 Bartell Drugs stores in Washington
CVS Pharmacy has announced plans to rebrand 20 Bartell Drugs locations in Washington as part of its acquisition of 64 Rite Aid stores in the Pacific Northwest. The company has not yet shared which specific Bartell stores will transition or whether other Bartell locations will remain open under the existing brand.
A CVS spokesperson acknowledged Bartell Drugs’ long-standing presence in Washington, expressing the company’s intent to maintain a selection of local products familiar to Bartell customers. CVS also noted that current Bartell employees are being considered for roles at the rebranded locations.
Bartell Drugs, a Seattle-based pharmacy chain established in 1890, became part of Rite Aid in 2020. Following Rite Aid’s Chapter 11 bankruptcy filing in 2023, hundreds of stores across the country have been listed for closure in recent court filings. The future of Bartell Drugs stores outside of the 20 CVS-acquired locations remains uncertain.
CVS currently operates around 70 pharmacies in Washington, Oregon, and Idaho. The rebranding is part of the company’s broader regional growth strategy, with an emphasis on preserving valued community connections and enhancing in-store offerings.
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Kroger announces planned closures of two Western Washington grocery stores
Kroger, the parent company of Fred Meyer and QFC, has announced the upcoming closure of two of its grocery store locations in western Washington. The Fred Meyer on Pacific Avenue in Tacoma will remain open through late September, while a QFC store in Mill Creek is set to close on September 3, affecting 76 employees. A Kroger spokesperson said the decision is part of broader efforts to operate more efficiently and support long-term business health. Impacted staff will have opportunities to transfer to other locations.
Local leaders are responding to the closures with a mix of concern and planning. In Tacoma, Councilmember Joe Bushnell noted the city’s Community and Economic Development Department is already working with property owners to explore future uses for the prime commercial space.
In Seattle, concerns continue to grow over the stability of neighborhood grocery stores. City Councilmember Joy Hollingsworth highlighted ongoing safety and security challenges, including loitering and shoplifting, which she says are putting two QFC locations on Broadway at risk. "During my tenure we've lost two grocery stores in my district. I don't want to lose another one," she said, referencing the recent closures of a Whole Foods and another local grocer.
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Levi’s adapts supply strategy amid tariff and shipping uncertainty
Levi Strauss & Co. is taking proactive steps to navigate global supply chain challenges, including ongoing tariff uncertainty and shipping disruptions. The company reported a 15% increase in inventory at the end of Q2, with about half of that intended to support early holiday demand. This move reflects a broader trend across the retail industry of advancing peak season shipping to mitigate risk.
To address external pressures, Levi’s is using a combination of pricing strategies, vendor negotiations, and diversified sourcing. Executives noted that these efforts are part of a broader transformation to make the company more resilient in the long term.
Key elements of that transformation include a shift to a more direct-to-consumer focus and the consolidation of its distribution center network. Levi’s recently sold a facility in Ohio and announced plans to close another in Kentucky as it moves toward a hybrid model that includes both owned and third-party distribution centers.
These initiatives are yielding results. Levi’s now anticipates a 1% to 2% revenue increase in 2025, an improvement from its earlier forecast of a slight decline. Leaders say the changes position the company to better handle future uncertainty and maintain strong service levels.
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Walmart embraces AI agents to enhance retail experience
Walmart is stepping into the future of artificial intelligence by unveiling its plans to use AI agents to enhance both customer and employee experiences. At a recent event in New York City, Chief Technology Officer Suresh Kumar announced that the company is “all in on agents,” emphasizing their potential to streamline operations across the board.
These AI agents will support everything from assisting customers through Walmart’s app to helping store associates and corporate teams complete routine tasks more efficiently. One example, a customer-facing assistant named Sparky, can already answer product questions and will soon be able to create and place orders based on user behavior with minimal input.
Internally, Walmart is also rolling out AI tools that automate repetitive tasks for staff, engineers, and vendors. The company sees this as a continuation of its long-term tech transformation, supported by its large datasets and global workforce.
While Walmart leaders acknowledge that the long-term impacts on jobs are still unknown, they see AI as a way to evolve, not replace, roles. As the company builds toward a more autonomous retail model, it is carefully evaluating how technology will fit within its business strategy.
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Off-price retailers stay strong as department stores evolve
The National Retail Federation’s 2025 Top 100 Retailers list, compiled by Kantar, reveals ongoing shifts in the apparel and jewelry sector. TJX Companies, which includes T.J.Maxx, leads among apparel Power Players and ranks No. 15 overall, showing continued growth in U.S. sales. Ross Stores and Burlington also remain competitive, supported by diverse product sourcing and sophisticated inventory systems.
While department stores are facing challenges, some are adapting. Dillard’s, despite a slower year, is the strongest among traditional department store brands. Nordstrom's future direction may shift with El Puerto de Liverpool now holding a 49.9 percent stake. Macy’s and Kohl’s saw year-over-year decreases in U.S. and comparable store sales, but both continue to serve key segments of the market.
Retailers inside shopping malls are attempting a revival, especially through experiential spaces and niche offerings appealing to Gen Z. Products from international markets, particularly Japan, are proving attractive to younger shoppers.
This year’s trends show off-price retailers maintaining momentum, while department stores navigate changes in ownership, strategy and consumer habits. The full NRF Top 100 Retailers list highlights these evolving dynamics in the U.S. retail landscape.
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WR diversity statement
WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.
We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.
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Renée Sunde, President/CEO — 360.200.6450 — Email
Crystal Leatherman, Dir of Local & State Government Affairs — 360.200-6453 — Email
Rose Gundersen, VP of Retail Services — 360.200.6452 — Email
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