When shoppers feel the strain of higher prices, retailers are an obvious target. But the US National Retail Federation (NRF) argues that costs beyond retail are also limiting what households can afford to buy.
In a commentary published on 16 September 2026, NRF chief economist Mark Mathews points to rising prices for essential services. These costs, he argues, can squeeze spending on retail goods even when goods prices rise more slowly.
Services take a larger share of US spending
Services account for roughly two-thirds of US personal consumption expenditure, according to the NRF. Mathews attributes their growing share partly to changing spending patterns and partly to higher prices.
Over the three years covered by the NRF's analysis, prices for financial services and insurance rose 21.1%. Housing and utilities rose 13.3%, while transport services increased 12.4%. Over five years, housing and utilities rose 30%, and financial services and insurance rose 33%.
The NRF contrasts those increases with longer-term trends for goods. It estimates that a comparable basket of goods costing $1 in the 1990s would cost about $1.28 today.
Its analysis also suggests that a basket of durable goods costing $100 in 1996 would cost about $71 today. Durable goods include furniture, electronics and household appliances.
These broad measures do not describe every product or household, and long-term trends do not erase recent price rises at the checkout. They do, however, underpin the NRF's central point: a household's ability to spend in stores depends on costs well beyond retail.
What the argument means for retailers
Mathews says competition and the ease of comparing prices constrain retailers' ability to raise them.
The NRF cites an average net profit margin of about 1.3% for publicly traded US grocers, compared with 18.5% for pharmaceutical companies and 29.9% for software companies in its sector comparison.
The businesses have different costs and operating models, and their average margins cannot explain an individual retailer's prices. The NRF represents the retail industry, so its account is one perspective on the affordability debate.
A UK parallel, with different measures
Costs outside retail also put pressure on households in other markets, although their scale and sources vary.
In the UK, Office for National Statistics figures for August 2026 show annual inflation of 3.4% for services and 2.7% for goods under the Consumer Prices Index (CPI). The CPI housing and household services category rose 4.9% over the year.
These UK annual inflation rates cannot be directly compared with the NRF's US price changes over three, five or 30 years. They do, however, illustrate why looking only at goods prices gives an incomplete picture of the demands on a household budget.
For retailers, the practical question is how much customers have left to spend after paying for housing, transport, insurance and other essentials. The answer will differ by market and household.
Changes in these costs can affect the amount consumers have available for retail purchases, even when retailers' own prices are rising more slowly.
For an international retail industry, that distinction matters. Retailers are competing not simply against other retailers, but for a share of household budgets that are also being shaped by the wider cost of living.
