Spring could be a season of weakening fundamentals for the retail industry. Many retailers are unlikely to achieve higher sales this spring than they did last year, Pulse Ratings analysts warned. 2021 retail sales had been buoyed by stimulus checks distributed in March. Not only will customers lack the extra income in 2022, but they also worry about fuel costs and supply chain issues driving up the cost of living.

Consumer sentiment seems to agree with Pulse Ratings wariness. This March, U.S. consumer sentiment declined by nearly 5% to a decade-long low. Confidence is down almost 29.7% from a year ago amid uncertainty surrounding inflation and the Russia-Ukraine war. Inflation rose 7.9% in February, its most significant increase in 40 years, and is expected to dampen discretionary spending through the year. And rising gasoline prices are likely to hamper March spending even further, as the February data captured only a few days of the war.

In an effort to curb that inflation, the Federal Reserve on Wednesday announced an interest rate increase of 0.25 percentage points, the first in a long-anticipated series of hikes. Analysts don’t expect the higher rates to impact retail spending negatively until 2023, but this will affect other rates for consumer and business borrowing costs across the U.S. economy, from credit cards to corporate debt.

Meanwhile, the government and the private sector are working to stave off future supply chain snags. The Biden administration enlisted about 20 logistics suppliers and retailers for a data exchange it hopes will clear logjams at ports and speed up the flow of goods nationwide. The Freight Logistics Optimization Works program will require companies to be more open with their supply chain data, which companies historically have considered to be closely held proprietary information. “Supply chains are notoriously closed and opaque, and the lack of data sharing has exacerbated the supply chain crisis,” logistics real estate firm Prologis said. Siloed data can delay cargo moving from one part of the supply chain to another, driving up costs and keeping supply chains vulnerable. FLOW will work with shipping lines, ports, terminal operators, truckers, warehouses and beneficial cargo owners.

At the same time, retailers are buying and leasing bigger warehouses to stockpile “safety stock” to offset future supply chain disruptions. This trend helped dramatically drive up the volume last year of U.S. warehouse property leases and purchases of 200,000 square feet and larger, according to CBRE. Retailers and wholesalers were the top buyers and lessors of such warehouses, accounting for 35.8% of all activity, up considerably from 24.7% in 2020. They dethroned last year’s leader, e-commerce-only users, which fell from 27.1% to 10.7% of activity. Third-party logistics users remained in second place, expanding their collective share from 25.8% to 32.2%. “Securing large warehouses has been a key strategy for retailers to navigate supply chain constraints,” said John Morris, executive managing director and leader of CBRE Americas Industrial & Logistics Services. “In response, retailers have increased their inventory to meet demand for both in-store purchases and increasing e-commerce sales.”

RELATED: John Morris also took up the helm of CBRE’s retail business in 2020

—Additional reporting by ICSC Small Business Center executive editor Will Swarts