U.S. retail spending remains stable, but consumers are making adjustments to purchase behavior, according to market researcher and analytics advisor Circana.
In the five weeks ending October 5, 2024, overall retail sales across general merchandise and consumer packaged goods (CPG) were up 3% in dollars and 1% in units compared to the same time in 2023, Circana reported. Discretionary general merchandise retail dollar sales declined 1%, while unit demand increased 1%. Non-edible CPG and retail food and beverage sales revenue grew 4% and unit sales performance increased 1% year over year.
“Consumers continue to demonstrate their resilience, both in their willingness to spend when the value is there and their ability to adapt in order to maximize that value,” said Marshal Cohen, chief retail industry advisor for Circana. “There is consumer optimism ahead of the holiday shopping season, but more is needed to fuel retail growth.”
Circana’s preliminary read on this year’s fall retail promotion weeks revealed consistency in consumer spending on discretionary general merchandise and their purchase behavior around major retail promotional weeks. While sales revenue for discretionary general merchandise during the two weeks ending October 12, 2024, was ahead of the two weeks preceding, that lift was aided by a pre-promotion pullback in purchasing, according to Circana. The same pre-promotion pullback behavior has occurred during fall and summer retail promotions in the past two years, the market research company noted.
Holiday indicators related to discretionary general merchandise spending began to take shape in recent weeks. Industries, including prestige beauty, home, auto and office supplies, are holding at a relatively steady sales pace, which will likely continue, Circana stated. The company also reports stabilizing technology sales and the gap in toy industry growth. Continuing deep declines in fashion categories are prompting Circana to anticipate the holiday season could fill pent-up demand in apparel, footwear and accessories.
“While specific retailers and products may reap rewards from retailer-driven promotional events, there is less impact on overall retail sales, and the consumer emerges as the big winner,” Cohen said. “Retailers and manufacturers need to get consumers to see the importance of purchases or optimize based on their needs at every step from inquiry to intent.”
