Traditional retail milestones such as the back-to-school shopping season are being reshaped by changing consumer behavior, according to market research and analytics company Circana.
Circana reported that for the four weeks ending August 31, 2024, total U.S. retail sales revenue in dollars across the combined view of discretionary general merchandise and consumer packaged goods (CPG) declined 1% compared to the same four weeks last year. Year-over-year unit demand remained level, Circana noted.
Year-over-year comparisons reveal a shift in performance, as sales revenue of each retail segment declined slightly, according to Circana. Retail food and beverage sales revenue in the four-week period this year was 2% lower and unit sales were flat versus the same period a year ago. Sales revenue and unit demand of non-edible CPG declined 1%; and discretionary sales declined 3% in dollars against a 1% unit gain in year-over-year comparisons.
“Consumers are buying the same amount of product, but they are spending less, and that spending is aligned with current needs,” said Marshal Cohen, chief retail industry advisor for Circana. “The defined block of time when that back-to-school spending traditionally occurred has faded, now spread across three waves of shopping and multiple shopping seasons.”
This year’s back-to-school spending is following a pattern similar to last year, but it’s falling short of last year’s performance, Cohen noted. The first two waves of back-to-school shopping, which began in the early summer months with back-to-college preparation and retailer promotional events kicking off school supply purchases, continued through August. The need for school supplies and new shoes was apparent, Cohen indicated, with the 4% increase in unit sales of office supplies and leisure footwear. However, the third wave of shopping, which focuses on the consumer wardrobe, was lacking in August as unit sales of apparel declined 3% compared to last year, Cohen said, adding America’s casualization has depleted the importance of back-to-school shopping for fashion.
School necessities —including leisure footwear, portable beverageware, computers, tablets and e-readers — were among the categories that rose to the top of the shopping list, Cohen said, observing innovation was a common thread across all of the fastest-growing discretionary general merchandise categories in August. Prestige beauty — namely hair, fragrance and skincare — and toy building sets rounded out the top performers for the month, making it clear that innovations in design, functionality and marketing are key to attracting consumers to spend outside their immediate need considerations, Cohen noted.
“Consumers may be waiting for the weather to shift to buy what they need for changing temperatures, but with the right product or product message, marketers still can inspire desire-based purchases,” Cohen said. “Growth opportunities lie in wait for marketers prepared to grab them at a new time, or with a new approach, diminishing the role of traditional shopping seasons and indicators. Lackluster back-to-school spending no longer signals soft holiday spending to follow; instead, there may be lingering benefits of pent-up demand.”
