Retailers are solidly outpacing restaurants through the back half of 2025, according to research from Bank of America. The retail sector has gained 12.2% since July, while the restaurant sector has shed 6.5%, according to S&P indexes tracking sector performance.
Comparable sales in retail have outpaced those in restaurants by roughly 1 percentage point per quarter since 2024, but that gap is expected to have widened to 4 percentage points in the fourth quarter of 2025, according to BofA.
At the same time, the bank wrote, the rate of positive estimate revisions has been twice as high in retail compared to restaurants.
As the restaurant sector has attempted to keep up, BofA noted, average check size grew 5 percentage points faster than in retail between the third quarters of 2022 and 2024. But that gap has closed to 1.4 percentage points, “suggesting that even in real terms retail’s same-store sales growth trends are better than restaurants'” where “transaction growth has slowed even as menu pricing has rolled off.”
The sectors also diverge on whether size helps or hinders an operation.
In restaurants, publicly traded conglomerates are largely lagging the wider restaurant industry, as same-store sales growth has slowed at a faster pace in publicly traded companies in the sector than at independent companies.
In retail, the opposite is true, as publicly traded retailers are “taking share from their smaller competitors.”
The State Street consumer discretionary index ETF (XLY), heavily weighted toward major retailers, has picked up 16% in the past six months, narrowly outstripping the S&P 500 (^GSPC).
