Consumers are exercising caution, but they are still spending on what they need and really want.

CHICAGO, July 24, 2025 — Despite the continuation of elevated prices and ongoing discussions and uncertainty around the effects of tariffs, the consumer is still spending. Overall, U.S. retail sales revenue was up 1% during the five weeks of June 2025 compared to the same time last year, while unit demand fell nearly 1% across the combined view of general merchandise, retail food and beverage, and non-edible consumer packaged goods (CPG). Retail food and beverage was the only retail segment with sales revenue growth, up 2% from June 2024, and unit sales were unchanged, according to Circana, LLC. 

In recent weeks, the video games, beauty, and toys industries benefited from passion purchases related to new launches, collectibles, and personal splurges. Consumers are demonstrating that they are willing to pay more for a product if it is what they really want.

“There are many vulnerable areas of retail, but in addition to maintaining their spending on food and other essentials in the current high-cost environment, consumers are prioritizing the purchase of products they are passionate about,” said Marshal Cohen, chief retail industry advisor for Circana. “The video games, beauty, and toys industries were a few who benefited from passion purchases related to new launches, collectibles, and personal splurges as consumers demonstrated that they are willing to pay more for a product if it is what they really want.”

Consumers are also responding to value pricing. The anticipation of July retailer promotions created some discretionary spending pullback late in June, resulting in a 9% lift in dollar sales during the two weeks ending July 12, 2025, compared to the prior two weeks. Once again, prestige beauty products, toys, and select tech categories were standout growth performers during the promotional period. However, discretionary general merchandise sales revenue was nearly 3% lower during this year’s two-week summer retailer promotion period when compared to results from last year’s promotion weeks.

“Deals mean a lot to the consumer today, and they are willing to put off a purchase when they know deals are around the corner,” said Cohen. “Brands and retailers need to work harder to break through the deluge of uncertainty by making their product offerings a priority for the consumer, especially during the critical back-to-school and holiday shopping seasons that are fast approaching.”