For cross-border sellers, August usually means the final sprint before peak season.

Back-to-school promotions are in full swing, with Amazon, Walmart, Target and other retailers discounting, while Black Friday/Cyber Monday stocking has already begun. Normally this is the time to push sales, rankings and Q4 momentum.

But this year, U.S. market signals are more complicated.

Peak season hasn't started, but American consumers have already hit the brakes.

AMZ123 learned that U.S. Department of Commerce data shows July retail sales fell 0.6% month over month, below expectations—the first decline in nine months and the largest in 14 months.

For cross-border sellers, the online channel matters more: nonstore retail sales fell significantly, with online sales down about 2.2%; core retail sales excluding autos, gasoline, building materials and food services fell 0.4%.

One direct reason: Amazon moved Prime Day from July to June this year.

As Walmart and other retailers ran competing promotions, much online demand normally released in July was pulled forward, so July's online drop partly reflects a "post-mega-sale hangover."

But cooling consumption is not just a timing shift.

In H1, large tax refunds supported U.S. consumption; as that extra money was spent, momentum weakened.

Meanwhile, price pressure is squeezing budgets and consumers are more price-sensitive. Reuters noted high living costs are eroding confidence. The University of Michigan's latest survey shows August consumer sentiment fell to 51.0 from 55.2 in July, down about 8% month over month.

Looking back, many sellers' "unusual feeling" over the past month now has an explanation.

On Amazon Seller Forums, sales decline discussions have increased. Some sellers said July sales fell about 7% year over year; others said sales dropped nearly half. Many wondered if traffic, algorithm changes, or a stronger off-season was to blame.

July retail data suggests at least part of the problem is on the consumer side.

Consumers are tightening wallets, and retailers are competing harder. During back-to-school season, Target, Walmart and others have added discounts to capture more from limited budgets.

Back-to-school demand itself is not weak. NRF data shows 2026 K-12 back-to-school spending is expected to reach $43.3 billion, a record, while college back-to-school spending will surpass $100 billion for the first time at $103.5 billion.

But spending is more cautious. NRF surveys show 46% of shoppers are still waiting for better deals, and 71% of K-12 parents would switch brands if their preferred brand is too expensive. Deloitte data also shows more families delaying purchases until August for better promotions.

In other words, demand remains, but consumers are clearly more price- and discount-sensitive.

With Black Friday and Cyber Monday ahead, price competition will heat up further.

That adds another concern. Peak-season stocking has begun; too much inventory risks overstocking, too little risks missing opportunities, and ad spending is hard to cut. Some sellers said if current sales continue into Q4, "this year's peak season will likely be harder."

Of course, one month of decline does not mean U.S. consumption has weakened across the board. July retail sales still grew 5% year over year, with clothing and food services maintaining growth. But the softening is happening right before peak season, adding uncertainty to Black Friday/Cyber Monday demand.

Beyond consumption, the currency market is moving.

AMZ123 learned that on August 17, onshore and offshore RMB against the dollar both broke 6.74, the strongest since early February 2023. At the end of July, the rate had just fallen below 6.75. In just over half a month, 6.74 was lost, and the dollar remains weak.

This trend is familiar to cross-border sellers. The falling dollar directly affects how much RMB sellers can convert back.

Some sellers mainly serving the U.S. market reported June exchange-rate fluctuations alone cut operating profit by about 10%; one 3C seller lost more than 300,000 yuan over four months. Another seller said if the dollar keeps falling in H2, "peak season profits will be impossible."

Why is the RMB still strengthening? Analysts say:

U.S. economic data remains weak: July nonfarm payrolls unexpectedly fell by 23,000, and the dollar index once dropped near 99.6. Meanwhile, China's July exports grew 23.9% year over year, and settlement demand from exporters supports the RMB.

Notably, corporate FX settlement demand is still being released.

State Administration of Foreign Exchange data shows July bank FX settlement was $266.3 billion and sales $248.0 billion, a surplus of $18.3 billion.

For exporters holding dollars, the mindset is understandable: when the dollar was high, many held foreign currency waiting for a better settlement price; now that 6.75 and 6.74 have broken, the risk of waiting longer is rising.

More companies are actively managing FX risk.

SAFE data shows in H1, companies signed nearly $1.4 trillion in FX derivatives to manage exchange-rate risk, up 40% year over year; the hedging ratio reached 35.3%, up 5.3 percentage points from 2025.

From phased settlement to forward hedging, exporters care more about securing profits.

The same applies to cross-border sellers. When the RMB was weak, waiting sometimes brought extra FX gains; now, with the dollar weakening, there is less room to bet on a rebound. Especially as peak-season stocking, inventory, ads and promotions all require cash, the exchange rate is unavoidable in profit calculations.

Seller Home comment

Weaker U.S. retail data plus RMB appreciation are squeezing seller profits and sales. It is advised to recalculate peak-season pricing and stocking pace, prioritize cash flow, and bet cautiously on big-promotion sales surges.

Source: AMZ123 Cross-border E-commerce
Original link: https://www.amz123.com/t/s8uOCLx7